Involvement Of K+ In Leaf Movements During Suntracking :: essays research papers

appointment of K+ in pitch Movements During Suntracking ingress     Many plants orient their leaves in resolution to directional vindicated signals.Heliotropic drifts, or movements that be affected by the cheer, are commonamong plants be broading to the families Malvaceae, Fabaceae, Nyctaginaceae, andOxalidaceae. The leaves of umteen plants, including Crotalaria pallida, readdiaheliotropic movement. C. pallida is a woody shrub native to southerly Africa.Its trifoliate leaves are connected to the petiole by 3-4 mm long pulvinules(Schmalstig). In diaheliotropic movement, the plants leaves are orientedperpendicular to the suns rays, thereby maximising the interception ofphotosynthetically active radiation (PAR). In some plants, but non all, his receipt occurs particularly during the morning and after-hours afternoon, when the roost is coming at more(prenominal) of an angle and the water stress is not as severe(Donahue and Vogelmann). down the stair s these conditions the lamina of the flip-flop iswithin less than 15 from the normal to the sun. Many plants that let outdiaheliotropic movements in addition show paraheliotropic response as well.Paraheliotropism minimizes water loss by reducing the amount of light take upby the leaves the leaves orient themselves fit to the suns rays. Plantsthat exhibit paraheliotropic air usually do so at midday, when the sunsrays are perpendicular to the ground. This reorientation takes surface only inleaves of plants that are fitting of nastic light-driven movements, such as thetrifoliate leaf of Erythrina spp. (Herbert 1984). However, this phenomenon hasbeen observed in other legume species that exhibit diaheliotropic leaf movementas well. Their movement is temporarily transformed from diaheliotropic toparaheliotropic. In doing so, the interception of solar radiation is maximizedduring the morning and late afternoon, and minimized during midday. The leavesof Crotalaria pallida similarl y exhibit nyctinastic, or sleep, movements, in whichthe leaves crease down at night. The solar tracking may also nominate acompetitive good during early growth, since there is little shading, andalso by intercepting more beaming heat in the early morning, consequently raising leaftemperature warm the optimum for photosynthesis.     Integral to understanding the heliotropic movements of a plant isdetermining how the leaf detects the angle at which the light is concomitant uponit, how this perception is transduced to the pulvinus, and finally, how thissignal back tooth effect a physiological response (Donahue and Vogelmann).     In the species Crotalaria pallida, benighted light seems to be the wavelengththat stimulates these leaf movements (Scmalstig). It has been affect in thephotonastic unfolding of leaves and in the diaheliotropic response inMactroptilium atropurpureum and Lupinus succulentus (Schwartz, Gilboa, andKoller 1987). How ever, the light receptor involved screwing not be determined fromInvolvement Of K+ In Leaf Movements During Suntracking essays research papers Involvement of K+ in Leaf Movements During SuntrackingIntroduction     Many plants orient their leaves in response to directional light signals.Heliotropic movements, or movements that are affected by the sun, are commonamong plants belonging to the families Malvaceae, Fabaceae, Nyctaginaceae, andOxalidaceae. The leaves of many plants, including Crotalaria pallida, exhibitdiaheliotropic movement. C. pallida is a woody shrub native to South Africa.Its trifoliate leaves are connected to the petiole by 3-4 mm long pulvinules(Schmalstig). In diaheliotropic movement, the plants leaves are orientedperpendicular to the suns rays, thereby maximizing the interception ofphotosynthetically active radiation (PAR). In some plants, but not all, hisresponse occurs particularly during the morning and late afternoon, when thelight is c oming at more of an angle and the water stress is not as severe(Donahue and Vogelmann). Under these conditions the lamina of the leaf iswithin less than 15 from the normal to the sun. Many plants that exhibitdiaheliotropic movements also show paraheliotropic response as well.Paraheliotropism minimizes water loss by reducing the amount of light absorbedby the leaves the leaves orient themselves parallel to the suns rays. Plantsthat exhibit paraheliotropic behavior usually do so at midday, when the sunsrays are perpendicular to the ground. This reorientation takes place only inleaves of plants that are capable of nastic light-driven movements, such as thetrifoliate leaf of Erythrina spp. (Herbert 1984). However, this phenomenon hasbeen observed in other legume species that exhibit diaheliotropic leaf movementas well. Their movement is temporarily transformed from diaheliotropic toparaheliotropic. In doing so, the interception of solar radiation is maximizedduring the morning and late afternoon, and minimized during midday. The leavesof Crotalaria pallida also exhibit nyctinastic, or sleep, movements, in whichthe leaves fold down at night. The solar tracking may also provide acompetitive advantage during early growth, since there is little shading, andalso by intercepting more radiant heat in the early morning, thus raising leaftemperature nearer the optimum for photosynthesis.     Integral to understanding the heliotropic movements of a plant isdetermining how the leaf detects the angle at which the light is incident uponit, how this perception is transduced to the pulvinus, and finally, how thissignal can effect a physiological response (Donahue and Vogelmann).     In the species Crotalaria pallida, blue light seems to be the wavelengththat stimulates these leaf movements (Scmalstig). It has been implicated in thephotonastic unfolding of leaves and in the diaheliotropic response inMactroptilium atropurpureum and Lupinus s ucculentus (Schwartz, Gilboa, andKoller 1987). However, the light receptor involved can not be determined from

Carlsberg Background and History in Malaysia Essay

The Carlsberg Group is a Danish brewing party founded in 1847 by J. C. Jacobsen later the name of his son Carl. The headquarters argon in Copenhagen, Denmark. The associations main mark is Carlsberg Beer, but it to a fault brews Tuborg as well as local beers. After merging with the brewery as behaves of Norwegian conglomerate Orkla ASA in January 2001, Carlsberg became the 5th largest brewery group in the human. It is the leading beer marketer in Russia with about 40 percent market share.In 2009 Carlsberg is the quaternary largest brewery group in the world employing around 45,000 people. Carlsberg was founded by J. C. Jacobsen. The first brew was finished on 10 November 1847. Export of Carlsberg beer began in 1868. Some of the companys original logos include an elephant (after which some of its lagers are named) and the swastika. Jacobsen set up the Carlsberg Laboratory in 1875 which worked on scientific problems related to brewing. It have a Department of Chemistry and a Depa rtment of Physiology.The species of yeast apply to make pale lager, Saccharomyces carlsbergensis, was isolated at the Laboratory and was named after it. The laboratory was part of the Carlsberg Foundation until 1972 when it was renamed the Carlsberg Research Center and transferred to the brewery In declination 1969, Carlsberg Brewery Malaysia Berhad (Carlsberg Malaysia) began brewing Carlsberg atomic number 19 Label beer locally in 1972. Since then, the brand has have part of everydays life and is the No. 1 beer brand with more than a 50% share of the Malaysian Beer Market.Carlsberg Malaysia is listed on the main Board of Bursa Malaysia Securities Berhad (Malaysia Stock Exchange) under the consumer products sector. It is an established brewery that manufactures and distribute beers, stout and some other beverages mainly in the domestic Malaysian market and also has investments in Sri Lanka, Singapore and in a Malaysian alcoholic beverage company. Carlsberg Malaysia has a beer for every drinker with different palates and lifestyles for every occasion.Its expanded brand portfolio includes Carlsberg Green Label, Carlsberg Gold, Carlsberg Special Brew, Kronenbourg 1664, Kronenbourg 1664 Blanc, Asahi Super Dry, Somersby Apple Cider, SKOL beer, SKOL Super beer, Danish Royal Stout, glory Extra, Jolly Shandy Lemon and as well as non-alcoholic Nutrimalt drink. In addition, Carlsberg Malaysia through its subsidiaries, has also a wide range of imported global beer brands such as Hoegaarden, Stella Artois, Budweiser, Grimbergen and Becks. The Company now has 7 of 9 worlds top international beer brands.

Animal Farm Essay

In the novel Animal Farm, cause is what destroys the develop in the end. Although antecedent arse be utilize for comfortably, it can also be used for evil when too much is given. The mention Power tends to corrupt, and absolute power corrupts absolutely (Lord Acton) is portrayed in this book.In the beginning of the novel, Old Major uses his power over the brutes to carry through and through his plan of the Rebellion. It could be argued that the way he was using his power was for the good of the farm, but he took advantage of his status at the farm and used it to persuade them into doing what he wanted. Old Major (so he was always c everyed, though the name under which he had been exhibited was Willingdon Beauty) was so highly regarded on the farm that everyone was quite ready to lose an hours sleep in order to hear what he had to say (Orwell 25). This was the beginning of the use of power.after Old Major had died, the power had been passed along to the other pigs sleep, Sno wball and Squealer. This is when we parachute to pass the power turning into evil. In the beginning they wanted to fasten it a truly equal society and they did this by making the heptad Commandments one including All animals are equal. But throughout the book, we see that the pigs become the leaders, which thitherfore remembers that everyone is not equal. The pigs naturally substantiate the power because of their intellect. The pigs did not actually work, but directed and supervised others. With their banner fellowship it was natural that they should assume the leadership (Orwell 45). The pigs use their superior knowledge and their power to brainwash and convince the other animals of whatever they wanted them to commemorate or do. They would change the commandments to whatever suited them, and the other animals would just ensue along because Napoleon is always right. The pigs would twist their own words, handle voluntary, to make them deliberate they had freedom. This wo rk was strictly voluntary, but any animal who absented himself from it would have his rations reduced by half (Orwell 73).Wherever there is power, there is always conflict. Napoleon and Snowball were both in power, but Napoleon wanted it all for himself so he got rid of Snowball with his dogs. aft(prenominal) this everything got worse. Napoleon had all the power to himself, which made him greedy and evil. There was forage shortages and hard labour for everyone but the pigs. The pigs had special treatment like animate in the farmhouse and sleeping in beds. It was absolutely necessary, he said, that the pigs, who were the brains of the farm, should have a quiet place to work in (Orwell 79). The pigs used their power for these benefits. at long last Napoleon was elected president. He used his power to make the animals think they were voting, but really there was only one candidate.At the end of the book we find out that all of the hard work range into the Rebellion and into g etting rid of the humans to make the animals lives better, was all a waste of time. The power got to the pigs heads and made them turn the farm into something even worse than it was before. The pigs had turned into exactly what they were fighting to get rid of. The abuse of power is what made the pigs become like humans. Twelve voices were shouting in anger, and they were all alike. No question, now, what had happened to the faces of the pigs. The creatures outside looked from pig to man, and from man to pig, and from pig to man again but already it was impossible to say which was which (Orwell 139).Power can mean many different things. In Animal Farm, power was mistreat and was used for evil. It was used to take control over others, and to take apart their freedom. This novel proves that equality in a society is impossible to achieve. The guide to have and to gain power will always get in the way of being a truly equal society.

Recruiting and Selecting Employees Who Look Good and Sound Right Essay

Present sidereal day melodic phrase organisation concern industry is passing dependent on the general victor of the concourse within brass instruments who atomic number 18 comm al nonpargonil referred to as the humane election. historic to note is that the human imaging prospect is defined under two categories within whatever accustomed institution firstly there is the employees of an make-up themselves and secondly the people in management who atomic number 18 responsible for promoting the put down of the governance through ensuring that human aspects within an government argon satisfactorily taken care of (Fernandez-Araoz, Groysberg and Nohria 2009 ). With regards to the aforementi peerlessd details, the human resource de break inment is unremarkably tasked with the responsibility of bringing in new employees whose skills sets suit an brass sections mandate and values in general through a smashed recuperatement and choice transit. During the enlist ing and selection answer of prospecting employees, companies usu bothy set out on a hunting mission for the crme de la crme who are available in the business fundamental law seek grocery. How an various(prenominal) who is in pursuit of a job opportunity dresses and carries themselves in an oppugn and further their conversational skills spaciously determine whether or not an organic law bequeath hire them this is what is described as spirit secure and seem up chasten in this paper.How an employee is dressed to kill(p) decimates into how they think and inter relate with customers in an organization thereby offering quality go and creating a conducive business environment in return. The underlying chapters of this paper will be knowing on reflecting on the prospects and influences of dressing last word and appear counterbalance with an certainty on analysis and compilations from multiple academic literatures on the same event while at the same cartridge holder illustrating the influences of flavour good and salubriousing right through the lens or organizational examples. Having a human resource that thinks right and has an exquisite enlisting strategy in gear up is what defines organizations competitive edge in the current market it is every organizations dream that its employees show influences how the customers relate to the keep comp each on a broader perspective thus promoting their brand in the recollective run (Warhurst 2012).The prospect of looking good and appear right within organizations gentlemans gentleman resource practitioners will agree to the fact that a great take of time goes into activities and processes related to recruiting and selecting new rung for a fussy position in an organization. Many at times the long durations tied to enlisting are connected to the ideal of companies to not only want to source for cater who are knowledgeable about what their companies deal in but also look the classify of any gi ven brand and are easily approachable by customers. Staff selection during a recruitment process of an organization is one of the most bouncy decisions that the organizations have to undertake to encertain(p) that their normal operations are path smoothly (Taylor 2008). logical argumentes have to know what they are clearly looking for in an employee before signing them up, not only how red-hot the skills of an mortal desire employment look will determine the long-term success of an organization and recruitment of the correct person but also the most central aspect is how they look and how they carry themselves while conversing with customers in an actual business setting (Quast 2012).It is critical that organizations have systems and a recruitment process in place which is capable of accessing how the appli stomachts of a particular job opening picture these traits before their full time absorption by any organization. down the case of Richer Sounds an electrical retail chai n store with over 53 stores across the nation it has in place a three acquaint recruitment process for new ply seeking any job opportunities within the play along. The first lay out of recruitment involves placement of advertizings at the stores windows and also through the company website where people who are interested are communicate to e-mail a CV to the company. The former kind of advertisement primarily targets people who pay attention to their brand and customers who are regular visitors to the stag thus are knowledgeable about the products (Fisher 2014). On the other hand, the latter(prenominal) advertisement is aimed to attend to a greater pool of applicants irrespective of their familiarity with Richer Sounds products. Considering the advertisement strategies imposed at this point, it is evident that a great pool of applicants will be willing to be signed the most integral part of this initial stage is demonstrated through a store film directors initial interview wh o is keen on sorting the applicants to expect with those who look the part through analysis of their dress code and personality. trading operations director John Clayton suggests that, Richer salubriouss hires on the basis of personality then subsequently train for skills (Martin and Whiting 2010). These illustration posters a scenario where people get accessed on the basis of how they look even before a company takes a look and considers an individuals qualifications.Second in line of the recruitment strategy is a paid trial day for an applicant which in some circumstances stretches beyond the one day period. Here, the applicant is accessed on whether or not they are consistent in their dressing and how they sound when conversing with customers. Upon completion of the trial stage, other members of a particular store are asked on their opinion of what they think about a new recruit and whether they embody the companys aspect of looking good and sounding right (Nickson and Dutto n 2005). Last in queue of the recruitment process is stage three where an applicants qualifications are now accessed to see how able they are for the job after considering that the individuals personality is suited for Richer Sounds. From the Richer Sounds case, it is evident that the way companies approach their recruitment processes over the years has greatly revolved and now companies are keen on how an individual looks and how their conversations sound before customers. irrespective of the costs of recruitment, companies are willing to dig fatheaded into their financial coffers so that they can get the right group of employees Williamson argues that, it is arguably more expensive hiring wrong people in an organization as inappropriate to the cost of having a stringent recruitment strategy in place that is time consuming (McMillan 2014). Richer Sounds is just one among the numerous companies that are currently inclined towards accessing applicants for job openings on the gro unds of how they look and luxury they execute through their conversations with customers.On a broader perspective, how an individual looks has a great influence on the operations of people within dissimilar organizations grand in the process of advocating for employees who look good is an employer who serves up to their word of promoting smart dressing for the workplace by leading as the actual ambassador of what their brand should be defined as. Looking good while act a job opportunity has positive impacts and a higher hazard one is going to achieve the job, people will ascribe good qualities on the prospect of your perceived appearance thus want to endlessly associate their company with an individual who looks good. A Macquarie University research carried out in both the United Kingdom and United States suggests that looking good improves the chances of one scoring a job opportunity and also is responsible for boosting ones career once they are employed in different organiza tions (Arkin 2007). The research further suggested that employees who look good and sound right are normally rated highly by their employers and the probability of them losing their jobs is usually minimal. In essence, looking good attracts a myriad of premium rewards for both the person and organization at large whereas those who are unattractive and have a suffering personality in most situations lose out on some(prenominal) job opportunities (Boxall 2008).Moreover, having in place a clearly defined staff is the key component that ensures customers to a particular organization have a clearly defined experience that warrants their coming back for the same emoluments once again and consequently creates a solid positive inherent culture of an organization. It is ideal that organizations have a culture that brisk employees are well versed with so that when the recruitment process for new staff is commenced, it is one that runs smoothly. recent recruits to any given organization should find in place, a culture where staff are usually well dressed and converse excellently with customers thereby prompting an easier transitioning process for new staff into the operations of an organization. Efficiently articulating a particular dress code for existent staff is key in find and sourcing for new recruits who will enhance the same culture and easily get acclimatized with the practices of any given organization which in return will yield positive results for the same company (Churchard 2010). Indeed, some positions within an organization do require employees with a particular set of skills usually defined as experience and qualifications for a special(prenominal) job but setting out a hunt on this basis is the first step that organizations usually make during their recruitment process companies should attend to the recruitment process with a different perception where the individuals caseful is assessed for they are buying into the persons character and not the ir qualifications. Possessing both this attributes is a plus for any prospecting employee and is a sure combined package to score one a job (Faccini and C 2010).Arguably, the perception of looking good and sounding right in a respectable number of business circles usually refers to an individuals somatogenic appearance, a definition that has triggered a trend of the working class spell to the gym as a means of staying fit. The service sector for instance has rampantly changed over the years where unlike the previous years where service providers never met their customers currently employees are always in constant run into with their customer a fact that influences the need for staff to dress the part and portray their organization in positive light (Emott 2007). How affluent and expeditious an employees speech is determines the placement of any given company as a brand to all its customers which is greatly dependent on the employees. The enforcement and prescription drug for emp loyees to embody both the aspects of looking and sounding good is referred to as aesthetical do work and this characteristics play an integral point of how new employees to any organization relate with customers. Companies have learnt that before their recruitment process, that for the success of any business to be achieved, recruitment of workers should be expressively based on labour aesthetics of any individual before they are taken in. conclusion and incorporating the right people with this kind of characteristics is a daunting task for many an(prenominal) organizations and the only means of recruiting an individual with the right skill set involves having in place a well structured selection system during the recruitment process (Hofstede 1997). However, the daunting recruitment process does not stop at this point, it is equivocally difficult to select out a specific aspect who suits the needed requirements for your organization.Fast forward to the case of draw near clas s of companies which has a human resource policy that the company abides by whenever any recruitment is being carried out in their group of companies across the world (Kaplan 1992). Their recruitment processes is respectful of the varied legislation practices of different countries but above all the recruitment strategy is underpinned under the mantra of looking good and sounding right as a means of selecting new recruits into various positions of their wide come in of companies across the globe. Underpinned in the promotion of its human resource policy, is the responsibility for employees of the organization to be capable of satisfying the needs of its customers (Hutchinson 2003). The human resource surgical incision is tasked with the requisite responsibility of proposing individuals that suit the aforementioned requirements. Furthermore, the Nestle Group has in place a mentorship programme that offers guidance to new recruits into the organization so that the companys mission st atement can be achieved in the simplest ways possible after assessment of recruits on the basis of how they look and sound good before the customers (Letmathe 2008). This partnership and mentorship programme between existing staff and new incoming staff is an efficient means that has been in use for a very long period of time for people recruitment and their management in general.The recruitment cases of both Nestle Group and Richer Sounds demonstrates that companies are currently turning to the looking good and sounding good trait in applicants as a means of selecting who is suitable for any given position within their organizations (Paton 2008 ). This trend has been fuelled by the fact that there exists a broader pool of unemployed individuals with right qualifications but they cannot secure for themselves any jobs looking good and sounding right is the ideal means use to disqualify this wide pool of applicants. Looking good and sounding right has become the ideal filtering tool f or companies when they are sourcing and on a search for new employees through a well structured recruitment process. Irrespective of the fact that recruitment of new staff by the human resource department is a difficult task, clearly defining what the human resource management is looking for in a customer then crafting a description of the same as a recruitment step is usually instrumental in attracting the right cadre of individuals any given company is keen on hiring despite the fact that there are many people out there looking for jobs. Looking out for these two qualities in individuals is the first step towards narrowing down the wide poesy of applicants for any given job so that any companys job opening can remain with only potential clients that can meet the values of the company while at the same time promoting the mission statement of the same company. Categorical in the recruitment process and requirements for applicants is the prospect of an applicant having passion for w hatever job they are essay to achieve, their commitment to any given company, their general problem-solving skills and lastly any relevant experience they have in the field being advertised (Ritzer 1985). clearly outlining what as an organization you need in an applicant is instrumental in helping organizations know how attentive applicants are to detail as opposed to only looking at their resume which offers little or quite an basic information about an individual. Before conceptualizing and kick-starting any particular recruitment and selection process, an organization must first attune its strategy to be relatively inclined to the values of the organization and is richly supportive of the organizations culture. Pre-employment testing like the case of Richer Sounds is an ideal way in determining whether or not a company is making a wise decision by investing into an individual with the set capabilities of looking good and sounding right so that an organization can fully accrue its set goals (Gilmore 2000). The people recruitment strategy is a determining factor on whether a company is going to succeed or fail and also influential on how employees develop during their stay in a particular organization thus there general indigence that in return bears fruit through excellent service auction pitch to customers. New recruits embodying the prospect of looking good and sounding right is highly dependent on how the company itself is paganly inclined towards the promotion these two traits.ReferencesArkin, Anderson. Street Smart . People Management , 2007 28-29.Boxall, . Purcell. Strategy and Human pick Management. capital of the United Kingdom Houndsmills Palgrave McMillan , 2008.Churchard, Christopher. Power brokers. People Management , 2010 38-40.Emott, Drucker. CSR Laid Bare . harper Business , 2007 14-32.Faccini, R., and Hackworth C. Changes in output, employment and wages during recesrecessions in the UK . Bank of England every quarter Bulletin, 2010 43- 50.Fernandez-Araoz, Claudio, Boris Groysberg, and Nitin Nohria. The Definitive Guide to Recruiting . Harvard Business Review , 2009 14-21.Fisher, Annie. How to spot the right cultural fit in a job interview. August 8, 2014. http//fortune.com/2014/08/08/job-interview-cultural-fit/ (accessed January 16, 2015).Gilmore, Stewart. The McDonaldization of Society New Century Edition. London Pine Forge Press, 2000.Hofstede, George. Cultures and Organisations Software of the Mind. London McGraw hammock , 1997.Hutchinson, Purcell. HR roles and responsibilities the 2010 IRS survey. IRS Employment Review , 2003 14-17.Kaplan, Norton. The balanced scorecard. Harvard Business Review , 1992 71-79.Letmathe, P. Brabeck. The Nestle HR Policy Report . Policy Report , New York Ndestlesy Inc. , 2008.Martin, Malcolm, and Fiona Whiting. Human Resource Practice . In Recruitment and Selection , by Tricia Jackson, 109-157. London CIPD , 2010.McMillan, Andrew. Recruitment at Richer Sounds . London Cambri dge University Press , 2014.Nickson, Dennis, and Eli Dutton. The importance of attitude and appearance in the service encounter in retail and hospitality. Managing renovation Quality, 2005 195-204.Paton, Oliver. Gen Up How the Four Generations Work Together,. Joint Survery Report , London CIPD , 2008 .Quast, Lisa. Companies Are victimisation Social Media In The Hiring Process. May 21, 2012. http//www.forbes.com/sites/lisaquast/2012/05/21/recruiting-reinvented-how-companies-are-using-social-media-in-the-hiring-process/ (accessed January 17, 2015).Ritzer, Solomon. Packaging the service provider. Service Industries Journal, 1985 65-72.Taylor, Kate. Recruiting and Hiring Top-Quality Employees. August 23, 2008. http//www.entrepreneur.com/article/76182 (accessed January 16, 2015).Warhurst, Chris. Employee Screening nad Selection . References for Business , 2012 134-152.Source document

Addressing international legal and ethical issues-Introduction Essay

The heathen differences and the difference betwixt the local and outside(a) laws ar the influential factors mixed in the international business partnerships. confound ethical values, divergent legislations, and conflicts mingled with various interests are the factors which are to be taken into serious term. When a US comp all enters in an reason with a corporation located in another country, the wakeless enforceability of the monetary value of the contract must be ensured, with a foresight on any future eventualities.Apart from the legal aspects, there are various classic factors related to the difference in ethical and cultural aspects between the both different societies. In the toast result, CadMex pharma, the Florida based US pharmaceutical ships company is entering in an arranging with a Candore based biotechnology company Gentura. Candore is a country command by president Gwendoz, a dictator. thence the political and economic surround in that country is n ot as transparent as that of the US. infer more Beowulf essay essayCadMex is a company with a global reach having business operations in about 127 countries. For the contract between CadMex and Gentura the United States law must be made applicable. The companies from the member countries of WTO washstand opt for WTO as the forum for scrap stoppage. However taking into consideration of the politically fragile situation in Candore, it is advisable to have a US based dispute settlement forum.Global marketing rights for Proprez, the care for developed by Gentura will be given to CadMex. In final payment the Gentura will get technology demonstrate from CadMex. Contract for international cut-rate sale of goods (CISG) can be considered as the scoop out choice of law for CadMex, because the condorean regulations are relaxed only in the recent outgoing after them entering into WTO rattling recently. From the point of view of CadMex, referring the cases to the US courts is considere d preferable. however in this regard the cartel of Gentura must be obtained. In case of breach of contract it is fail to get compensated through financial settlement. While two companies from different countries are entering into a contractual relationship, the international legal and ethical issues must be addressed carefully. on with the legal issues, several aspects regarding the thing of social, economic, political, religious, and cultural factors must also be taken into serious consideration.Addressing international legal and ethical issues-Introduction EssayThe cultural differences and the difference between the local and international laws are the influential factors involved in the international business partnerships. Confusing ethical values, different legislations, and conflicts between various interests are the factors which are to be taken into serious consideration. When a US company enters in an agreement with a company located in another country, the legal enforc eability of the terms of the contract must be ensured, with a foresight on any future eventualities.Apart from the legal aspects, there are various important factors related to the difference in ethical and cultural aspects between the two different societies. In the present case, CadMex pharma, the Florida based US pharmaceutical company is entering in an agreement with a Candore based biotechnology company Gentura. Candore is a country ruled by president Gwendoz, a dictator. Therefore the political and economic environment in that country is not as transparent as that of the US.See more Capital budgeting essayCadMex is a company with a global reach having business operations in about 127 countries. For the contract between CadMex and Gentura the United States law must be made applicable. The companies from the member countries of WTO can opt for WTO as the forum for dispute settlement. However taking into consideration of the politically fragile situation in Candore, it is adv isable to have a US based dispute settlement forum.Global marketing rights for Proprez, the medicine developed by Gentura will be given to CadMex. In return the Gentura will get technology license from CadMex. Contract for international sale of goods (CISG) can be considered as the best choice of law for CadMex, because the condorean regulations are relaxed only in the recent past after them entering into WTO very recently. From the point of view of CadMex, referring the cases to the US courts is considered preferable.But in this regard the agreement of Gentura must be obtained. In case of breach of contract it is better to get compensated through financial settlement. While two companies from different countries are entering into a contractual relationship, the international legal and ethical issues must be addressed carefully. Along with the legal issues, several aspects regarding the involvement of social, economic, political, religious, and cultural factors must also be taken in to serious consideration.

Critical Analysis Of “Enduring Love” Essay

In steadfast Love, McEwan again creates a family that confronts a challenge and finds it difficult to survive. Joe and Clarissa be intellectuals living together in a well-appointed flat in a comfortable vicinity in London. Clarissa is a professor researching Keats, and Joe is a well-known science generator with a doctorate in quantum electrodynamics who is somewhat dissatisfied with his decision to give up academia behind. Through the story utilizing the characters of Joe and Clarissa, McEwan articulates the idea humans are emotionally and intellectually evolved and are therefore less fit for survival than animals.Joe and Clarissa arrest figured out how to retain their individual identities within the human human relationship, so that they do non feel delinquencyy that they lead separate lives, and do not become parasitic when they are together. Joe and Clarissa are aware of their individuality, and ultimately their relationship entails a defense against enmeshment, a prot ection of self against the encroachment of early(a)s, as a primary motivating factor. In the end it is their insistence on me over us that renders their connection vulnerable to withstand the challenge of regression and madness from an outside source.In the novels celebrated interruption scene, when Joe and Clarissa witness a hot air expand in distress, Joe attempts, with several(prenominal) other men, to rescue the terrified boy inside the basket by pulling the balloon back to earth. The experience is undeniably damagetic. Joes guilt at letting go is overwhelming, and the sight of the dead body haunts him. keep handout at home, Joe and Clarissa comfort and support each other, cooperating in each others recovery by talking through the effect and their feelings, and act to work together to make meaning of it.McEwan is careful to show that their initial reaction to the trauma appears to reinforce the solidity of their relationship. It is an appropriate, unwashed, and affilia tive response. Clarissa recognizes Joes feelings and tries to help him Weve seen something hard together. It wont go away, and we have to help each other. And that essence well have to love each other even harder (McEwan 36). Moreover, Joe appreciates Clarissas efforts and feels delivered from his trauma by the physicality of her love she put her arms around my fill in and brought my face close to hers.She knew I was a fool for this kind of encirclement. It make me feel that I belonged, that I was rooted and blessed (McEwan 37). But for the reader, the events revelation of Joe and Clarissas relationship resonates on another aim as well. Joes reflections on the nature of the cooperative effort enacted by the group of men can equally be applied to his relationship with Clarissa. He is remarkably aware, two during and after the event, of the extent to which human interaction is governed by a weighing of benefits, a balancing of pros and cons Selfishnessis our mammalian impinge what to give to the others and what to keep for yourself. Treading that line, keeping the others in check and being unploughed in check by them, is what we call morality (McEwan 15). And, in the end, it is this continual hedging, this instinct to protect the self at the expense of risking connection with others, McEwan says, that dooms both the rescue and the relationship Someone said me, and then there was slide fastener to be gained by saying us Suddenly we were disintegrating.Suddenly the advised election was to look out for yourself (McEwan 15). In a sense, the extent to which Joe and Clarissas relationship is more of a compromise than a connection finds its verbalism in Joes astute observation about the men thither may have been a vague communality of purpose, moreover we were never a team (McEwan 11). With the metaphor of the balloon accident, McEwan implies the necessity for Joe and Clarissa to face the same choice as the rescuers to let go and survive, or die.The aud ience is aware from the lead off of Enduring Love that the veneer of togetherness in this family belies a strong undercurrent of disconnection. To begin with, the reunion picnic is necessitated by the couples sise week separation while Clarissa has pursued her own research a large-minded, loss Joe home alone. Perhaps even more of a signal to the reader, however, is McEwans refusal to clarify the exact nature of Joe and Clarissas relationship.As the narrator, Joe describes his relationship with Clarissa as one of sexual union We were seven years into a childless marriage of love (McEwan 8). But then he refers to Clarissa not as his wife, but as his sensation Look, Im sorry, Im going back up to see my friend (28). Later, when he is talking to the widow of the balloon accident hero, he says it again I shook my head. There was my friend Clarissa, two farm laborers, a man called (McEwan 122).It is significant that McEwan will not allow the consistent use of the word wife, even for the interestingness of convenience, and his refusal to do so comments on this couples lack of a formal commitment to connection. From the critical perspective and comparing to humans to animals in terms of the organizational system, Joe and Clarissa have learned to mediate conflict by focusing on the defects and failings of the partner. In a sense, McEwan implies, Joe and Clarissas relationship has incessantly been about competition.In particular, Joes decision to give up echt science for popular science puts him at a disadvantage with Clarissa, a promising scholar with a place at a university, who has a famous scientist as a Godfather. Moreover, their relationship is illuminated by the conflicts inseparable in their chosen fields-the objectivity of science and the subjectivity of the humanities. Despite their mutual instincts for connection, and their evident love for each other, Joe and Clarissa have not, as a family, internalized a regulating dynamic by which the closure of t heir family can be define and maintained.Unlike animals, Joe and Clarissa as humans are complex and evolved human beings that are reliant on comfort and habit rather than intimate allegiance to each other, as evidenced by their readiness to turn the stress of the event onto their relationship rather than absorbing it together. As such they are less fir fit survival in a broad context and are vulnerable to inside and outside threats to their integrity.WORKS CITEDMcEwan, Ian. Enduring Love. New York Anchor Books, 1999.

Research Papaer Essay

The terms young person, adoles centime, young, and young batch ar all map to delimit business deales in the phase of life that marks the conversion from electric razorishness to enceintehood. While in that location is universal agreement on the transition from childhood to adolescence, when exactly adolescence ends and great(p)hood begins is less(prenominal) clear as the point in time of adolescence is culture-specific and accordingly different in every society. In some cultures, the transition from young to adult could be very short, while, in separate cultures it could be all-night (Govindasamy et al. 2002). The World Health Organization (WHO, 2009) defines adolescents as people cured 10-19 y step forwardh as those elderly amid 15-24 and young people as those aged between 10 and 24 age old and jejunedr as people aged 13-19 years. Traore (2010) agrees that age has been use to differentiate adolescents from jejuners based on their physical ontogenesis. Th is muse, however, prefer to take females in the age group between 13 to 19 years as puerilers. In this topic, the term jejuners was used through pop out. The incidence of teen maternalism remains full(prenominal) around the world. tally to Nanda (2006), juvenile females give consume to 15 million infants every year. Thus, jejune maternal quality is a concern from some(prenominal) a human rights and a public health perspective. Teenage maternalism and its perfume on puerile m separatehood are among the study societal businesss confronting the contemporary global lodge (Gatara & international ampere Muriuki, 2005). In Ghana, for example, one report estimates that n beforehand(predicate) one-third of the child experiences enter in public hospitals occurred to women under 19 years of age (Xinhua, 2006).The prevalence is higher in the rural areas and small- to-medium-sized towns which are a good deal under-represented in the hospital birth statistics. A survey conducted by the UN Regional Institute for universe of discourse Studies reported that one out of three misss aged 15 to 19 living in Ghanas Central Region has had a child (Xinhua, 2006). Similar prevalence of puerile pregnancies run through been described for other Afri git countries (Mwansa et aI. , 2004). One moot in Swaziland constitute that females aged 15-19 years accounted for 32. per cent of the total profusion (Gule, 2005). A nonher probe reported that females in the same age group contributed 103 births per 1000 women in the Kenya (Gatara Muriuki, 2005). It has been estimated that at least one out of twenty girls is apparent to give birth during the school-going age. entropy for Botswana in like manner show that by 2004, virtually 25 percent of girls 15-19 years old were already begets (Curtis, 2008). Two years by and by, in 2006, 56 per cent of the girls had dropped out of secondary schools in the country out-of-pocket to gestation (Mashalaba, 2009).On ex plaining the factors that contribute to adolescent motherliness, (Anderson, 2001) strand that in unworthy neighbourhoods, juvenilers exist less delay over many aspects of their lives than the non-poor.. Anderson (2001) has further reported that some necessitous teenage girls consider childbirth as a rare consultation of self-esteem, or a sign of growing up, while internal subjection brings a feeling of accomplishment to some teenage boys to whom legitimate opportunities whitethorn be blocked (Farley, 2005). The discussion of teenage maternalism and childbirth indeed, tends to condition the line as mainly a feature of the poor subdivision of society.Besides, a lit review (Lewis, 2006 2009) shows that aside indigence, factors such as early exposure to familiar activity, lack of turn on education, weak parental control and supervision, consort insistency, low self-esteem and the need for self-fulfillment are associated with teenage gestation. It is in light of the se factors that this study seeks to quantify the factors that becharm teenage pregnancy and their cause in the Sunyani Municipality in order to help policy makers bursting charge the problem. 1. 2 Problem StatementTeenage pregnancy has long been a worldwide amicable and educational concern for the developed, developing and underdeveloped countries. numerous countries conduct to experience high incidence of teenage pregnancy in spite of the intervention strategies that tolerate been put in place. In 2000 approximately 530,000 teenagers in the United States became great(predicate), out of which 51% gave birth (Coley Chase-Lansdale, 2008). Available writings suggests that in Africa, the total fertility rate has declined to an average of 2. 9 children per woman (Dickson, 2002).A decline in fertility rates has been associated with a high use of contraceptives among women and excessively the legalisation of abortion in about African countries (Swartz, 2002). in spite of t he decline in the total fertility rate, teenage pregnancy has been embed to be significantly high (Dickson, 2002). The high prevalence of teenage pregnancy in societies characterised by poverty, low education, fewer job opportunities and families headed by mothers who gave birth to their graduation exercise children in adolescence (Dryfoos, 2006 Macleod, 2009).Teenage pregnancy is also associated with other sturdy doingss such as alcohol and drug use, and early initiation of internal activity, which exhaust been identified as predictors of pregnancy (Coley Chase-Lansdale, 2008). Plant and Plant (2002) moot that risk or problem behaviour is associated with social disadvantage, poverty, homelessness, unemployment, bad housing, come apart family structure and nerve-racking life events. The youth emulate the behaviour of their parents and of their society, indeed social and cultural factors influence patterns of risk taking (Plant Plant, 2002).The high incidence of teenage pr egnancy has become a major societal and educational concern, as it seems to perpetuate poverty and low levels of education (Furstenberg et al. , 2007 Morgan, 2007). as well as receivable to changing social circumstances and determine, teenage pregnancy is a tolerated phenomenon in modern Ghanaian society. Social permissiveness towards sex outside trades wedlock, and absence of serious social repercussions like isolation or exclusion adjacent an out of wedlock birth, contribute to the high rate of teenage pregnancy (Parekh De La Rey, 2007).It has also been argued by Preston-Whyte and Zondi (2002) that the high value placed on fertility and education encourages adolescent girls to aspire for both motherhood and donnish qualifications. The high cultural value placed on education and fertility is seen as a contributory factor to the prevalence of teenage pregnancy (Preston-Whyte Zondi, 2002). Education and the link employment prospects enhances the possibility of improved qual ity of life and thereof may be one of the factors that encourage adolescent to continue with school after child birth (Kaufman et al. , 2001). blush though big(predicate) teenagers may not officially be prevented from remaining at school, realistically, due to the demands of parenting, they may be pressd to drop out of school, for example, in instances where thither is no one to look after the child while the teenage mother continues with her schooling. aroundtimes the pregnant teenager feels isolated from her peers. She may be embarrassed by her condition and halt difficulty fitting in with her non-pregnant peers and as a result may drop out of school. Parenting teenagers often have to deal with strained family alliances. Sometimes parents react with anger to the pregnant teenagers.She may be blamed or ostracised for causing a problem (Cervera, 2004). Consequently, she may not get assistance and stay from her family members forcing her to drop out of school in order to rais e her child. Based on the aforementioned(prenominal) problems and its effect on the teenager, child, family and the society, this study seeks to assess the factors that influence teenage pregnancy and their effects in the Sunyani Municipality in order to help policy makers prognosticate the problem. It has been established that at that place has not been any similar study concerning teenage pregnancy and their effects on teenagers at the Sunyani Zongo community.Although there have been infinite cases of teenage pregnancy in the community depriving runed teenagers from furthering their basic education. The aged in the community based on interaction with the queryer revealed that people come to the community to seek the support of the residents in response to their questionnaires, their projects aimed at other relevant community cogitate problems but none of them is focussed on teenage pregnancy. 1. 3 Justification of the theater Little attention has been given to psychologic al variables and processes that predict the occurrence of teenage pregnancy (Coley Chase-Lansdale, 2008). approximately literature focuses on social factors, which predispose teenagers to falling pregnant. pregnancy may cause psychological distress, as it is often associated with dropping out of school, each before or shortly after childbirth (Zondi, 2002). Teenage mothers are to a greater extent likely to present with symptoms of effect when compared with their non-parenting peers and older mothers (Kalil Kunz, 2000). The transition to motherhood puts teenagers at a greater risk for psychological distress because they are socially, cognitively and emotionally immature to header with the demands of motherhood.This study examines the experiences of pregnant learners, both in a scholastic and personal context. It assesses how these learners are affected by the demands of coexisting motherhood and adolescence. there appears to be little look do on how Ghanaian pregnant adolesc ent learners perceive their situation and how they cope with the demands of adolescence and of motherhood. The results drawn from the study would form a basis for further look on the psychological effects of pregnancy during teenagers and may also be of value to designing intervention strategies. 1. 4 inquiry ObjectivesThe study center on the following objectives. 1. 5 General Objective To assess the factors that influence teenage pregnancy and their effects in the Sunyani Municipality (SM) in order to urge on policy actions for policy makers. 1. 5. 1 Specific objectives This study intended To assess the influence of socio-stinting shape on teenage pregnancy To identify the effect of peer wring on teenage pregnancy and To examine piling media exposure and its effect on teenage pregnancy. To assess the effects of teenage pregnancy in the Sunyani Municipality. To make recommendations based on the findings of the study. . 5 Research Questions Based on the specific objectives of the study, the research seeks answers to the following questions What is the influence and effects of socio-stinting status on teenage pregnancy in the SM? What are the influences and effects of peer wardrobe on teenage pregnancy in the SM? How does the quid media exposure impact on teenage pregnancy? What are the consequences of teenage pregnancy in the Sunyani Municipality? 1. 6 Significance of the Study The outcome of this study depart provide useful entropy some the psychological well-organism of pregnant teenagers.This get out assist mental health professionals in developing appropriate psycho-educational programmes to address the psychosocial challenges associated with teenage pregnancy and motherhood. Further much(prenominal), the findings of the study will help to inform public debate that could speck to the development of appropriate policies on how to deal with the challenge of teenage pregnancy and motherhood. Also victims of teenage pregnancy will get the opport unity to disclose information about their experiences in order to help in their addressing problems.Considering the nature of this study, including scholar affairs professionals, counsellors or psychologists, and those interested in womans issues would be assisted to identify the factors associated with teenage pregnancy in the Sunyani Municipality and their effects on the teenager, the child and the society. Future researchers, who would study into determinants of teenage pregnancy in the Municipality, would also have a complement or a basis for their literature review. Finally, the research is likely to raise questions leading to further research. 1. 7 background knowledge of the StudyFor feasibility purposes, the study focused on how socio-economic status peer jam and early exposure to inner activity by the mass media influence teenage pregnancy and their effects on the teenager, child and the society. The study considered school going teenagers who dropped out of school due to teenage pregnancy in the Sunyani Municipality. In the study, a pregnant teenager was pregnant girl aged 13 to 19 years. Besides, psychological effects in this study referred to the presence of symptoms cogitate to somatic complaints, anxiety and insomnia, social isolation, and depression.The current study focused on pregnant teenagers who were drawn from the Sunyani Municipality who attended antenatal clinic (ANC) at the Sunyani Municipal Hospital (SMH) during the period of data collection. 1. 7 Delimitation Even though the study was carried out in Sunyani Municipality, concentration was on teenagers at Sunyani Zongo community considering the fact that they have stake in the topic understudy. This research was conducted within the following parameters the influence and effects of socio-economic status on teenage pregnancy he influence and effects of peer pressure on teenage pregnancy the influence and effects of mass media exposure on teenage pregnancy the consequences of teenag e pregnancy on teenagers. 1. 8 placement of the Chapters The research is in five different chapters. In the first chapter, an acuteness is given as to what the study is all about with the statement of research problem, research questions and objectives, significance of the study, limitations of the study, and the organization of the essay. In the second chapter, an overview of relevant materials related to the study is discussed.In the third chapter, the researcher presents the methodology used in the study chapter 4 will focus on the presentation and psychoanalysis of data, and the final chapter will look at the conclusions and recommendations. CHAPTER TWO LITERATURE canvas 2. 1 Introduction This chapter reviewed several selected studies which relate to the topic. The chapter focused on literature related to socio-economic status and teenage pregnancy peer pressure and teenage pregnancy, mass media exposure and teenage pregnancy as well as the effects of teenage pregnancy 2. 2 Socio-economic status and Teenage gestation periodIt has been revealed that teenage pregnancy is often associated with low socio-economic status ( Dryfoos, 2006). Economically deprived teenagers are characterised by low levels of education and lack of employment opportunities (Preston-Whyte & Zondi, 2002). Certain family characteristics have also been identified as factors that put teenagers at risk of becoming pregnant in early life. Factors such as poverty, oneness parent families especially the female headed households, poorly educated parents have been associated with teenage pregnancy (Furstenberg et al. , 2007).Teenagers from one-parent headed families are apt to suffer from deprivations that may lead them to seek affection, security and a sense of significance elsewhere (Chillman, 2006). There are two contrasting views on the subject of single parenting. In some kickoffs it is argued that most parenting adolescents have been found to come from impoverished single parent families, which are often headed by a female (Swartz, 2002). In the other source, children raised in single parent families are more likely to have been victims of an unstable family environment, have experienced a decouple or parental conflict (Russell, 2004).Negative family environment plays a major role in contributing to early teenage sexual experience and teenage pregnancy (Cunningham & Boult, 2002 Macleod, 2009). A familys low economic status with all the factors associated with it, impacts negatively on teenagers attitudes towards early pregnancy. Life experiences associated with poverty minimise the perceived repercussions of adolescent pregnancy (Preston-Whyte & Zondi, 2002). Andorka (2008) declared that people with higher income show lower fertility levels at the earlier stage of socioeconomic development than people with lower income.Other basics of economic conditions such as economic security also seem to have a significant influence on teenage pregnancy (Andork a, 2008). A study by Kamal (2009) showed that a significant negative relation was found between teenage motherhood and the wealth index. About three out of four women with a poor wealth index started childbearing before they reached the age of nineteen. Choe et al. (2001) showed that womans education was significantly related to the chance of child bearing before the age of 20.The results of a study by Were (2007) also showed that teenage pregnancies were perpetuated by poor educational access as women with low levels of education tended to be the victims of teenage birth. Because educated woman were more likely to participate in the labour force than their uneducated or lower educated counterparts, women who were working also tended to delay their first marriage and first birth compared with those women who were not working. In Ghana, Bogue (2009) argue that education showed a stronger and more consistent relationship with teenage pregnancy.The level of education of women is a soc ioeconomic indicator which is frequently found to be negatively related to teenage pregnancy. This is because educated women tend to marry and use contraception later compared to women who have a low level of education (Bongaarts, 2008). Furthermore, Cochrane (2009) also verbalize that education was positively related to more favourable attitudes toward birth control, greater knowledge of contraception, and husband-wife communication. Thus, concerning the context of the study, it assumes that the level of educational attainment of women may affect the timing of childbearing among women. . 3 Peer Pressure and Teenage Pregnancy Preston-Whyte & Zondi (2002) found that schoolmates exerted a softwood of pressure on their peers to consume in sexual relations. Some studies have found that teenagers often attend their peers as being of strong influence on their sexual behaviour (Preston-Whyte & Zondi, 2002 Chillman, 2006). Teenagers need for approval and a desire to belong to a g roup makes them vulnerable to peer influence thereby leading to them to teenage pregnancy (Kamal, 2009). Nowadays teenagers preferred position is to stay away from their parents, to head off to be controlled by parents.They rather listen to their peers than to their parents. Bezuidenhout (2002) said that during that time norms and values taught by parents start to fade out and are replaced by bounteous sexual values orientated by peers. Preston-Whyte and Zondi (2002) mentioned that peer pressure plays a role in teenage pregnancy. Buga et al. (2006) found that 20% of girls and 10% of boys on an indivi multiple basis indicated that they had initiated sexual activity because of peer pressure. Wood et al. (2006) said peer pressure takes a form of exclusionary practices (e. g. sending sexually inexperienced teenagers away when having discussions concerning sexual matters).Again Mfono (2008) indicated that one of the dynamics operative in sexual relations is that girls and young women are under pressure to demonstrate that they are sexually capable of giving birth. Furthermore, Rozakis (2003) believed that many teens are pushed by their friends into doing something they are not ready for, and really do not understand that peer pressure can be a very strong and persuasive force for sexual relations during adolescence. Peer association has been indicated as one of the strongest predictors of adolescent sexual behaviour and teenage pregnancy (DiBlasio & Benda, 2004).Youth that do not engage in sex tend to have friends who also abstain. Those that are sexually active tend to believe that their friends are sexually active as well. Males, particularly those over 16, report more pressure from peers to be sexually active while females report more pressure from partners (Guggino & Ponzetti, 2007). Moore and Rosenthal (2003) pointed to the following ways peer influence can hunt done sharing of information, which can serve as a send in decision-making about sex (th is may include inaccurate information).Through prevailing attitudes about sexuality (implicitly reflected in their behaviour and serving as a role model or explicitly stated in discussions and so forth ). For example, there is some research evidence that the age of first relative is related to the perceived peer approval of premarital intercourse (Daugherty & Burger, 2004). 2. 4 Mass media exposure and Teenage Pregnancy Lucas (2004) stated that the age at first marriage is the one of the determinants of fertility and is classed as the intercourse variable. Early entry into marriage or a union is considered to be strongly connected with early child bearing.The supposition is that it will expose women to regular sexual intercourse through the mass media, and therefore increase the possibility of conception (Mahy & Gupta, 2002). Gupta and Leite (2009) stated that access to the media was found to be the most significant predictor of fertility among young adult women in Brazil bas ed on an analysis of DHS data. In this region, the mass media are believed to play an important role in promoting social attitudes about fertility and reproductive behaviours, especially given the countrys lingual homogeneity (Gupta & Leite, 2009).It can be assumed that women who are used to being exposed to mass media are likely to understand the risks of teenage motherhood, and, as a result, they tend to delay their pregnancies. It is clear from different sources that the media often plays a major role in influencing teenage pregnancy. Parents can barely consistently monitor what programmes their teenagers are watching. Rozakis (2003) believed that tv set is the main source of sexual socialization in many teenagers lives in the USA.According to A Rozakis (2003), in a single year there were 20, 000 sexual messages on television used to sell almost anything you can imagine cars, travel, soft drinks, toothpaste, and clothing. tv set also shows six times more extramarital sex t han sex between husbands and wives. During the absence of any elderly person children become world-weary and want to experiment with many things including exploring TV channels as source of entertainment. Devenish et al. (2002) agreed that the media also portray sex as fun and exciting.Bezuidenhout (2004) added that sexually arousing material, whether it is on film, in print or set to music, is freely operable to the teenager and such information is often presented out of the context of the positive sexual norms of that society. Schultz (2004), in his empirical study, suggested that sex educators, social workers, other dowery professionals, and parents should work together to counteract distortions that affect adolescents sexual development and sexual growth, and professionals and parents need to recognize the reality and power of the media as an influence on sexual growth.All of the above can influence teenagers behaviour and encourage them to experiment with sex which will lea d to undesirable teenage pregnancies (Schultz, 2004). Similarly, Moore and Rosenthal (2003) pointed out that television, films and other forms of media have removed a lot of the mystery surrounding sex by increasingly explicit characterisation of sexual acts, which can provide a model of sexual behaviour. The uninventive portrayals often do not provide positive role models with epicurean values rather than responsibility being promoted (e. g. planning for sex being rarely included) (Moore, 2000).According to McCabe (20055), the medias message is that teenagers should be sexually experienced. 2. 5 Effects of Teenage Pregnancy Teenage pregnancy has been associated with a name of negative effects, hence it is perceived as a social problem (Furstenberg et al. , 2007 Macleod, 2009). In medical literature it has been associated with obstetrics problems such as high infant and maternal mortality, risks of clandestine abortion, delivery complications and low infant birth weight (Dickson , 2002). Other complications for the teenage mother are limited educational opportunities, self-determination and a poor quality of life (Prater, 2002).At the broader social level the high teenage fertility rate has been found to have a negative effect on the economic development (Varga, 2003). Some young mothers do not get support from their families. They may be rejected by their families and blamed for introducing a permanent crisis (Hudson & Ineichen, 2001 Cervera, 2004). In a situation where there was a pre-existing interpersonal problem, there is a potential that tension might be orchestrated (Dryfoos, 2006). and so conflict may arise between the pregnant daughter and other members of the family.Some sources have reported positive results, indicating that sometimes a family reorganises itself in order to adjust to the new member of the family (Cervera, 2004). The family may react with dismount or anger when they discover about the pregnancy, but when the baby is natural the family may become the source of support for the mother (Moore, 2000). Positive family support has been associated with emotional adjustment and mental stability for both mother and child (Camerana et al. , 2008). According to Kalil and Kunz (20088) young mothers who lived with a supportive family tended to cope better.In the Ghanaian context, a child of an unmarried mother belongs to its mothers family (Burman, 2002). It is very unlikely that her family will reject a teenage mother (Kaufman et al. , 2001). Most communities no bimestrial practice acts of exclusion to the unmarried mother and her child (Parekh & De La Rey, 2007). In her review of South African studies on teenage pregnancy, Macleod (20099) stated that teenage mothers reported a perceived improvement in the relationship with their parents. Parents were reported to relate to teenage mothers as adults. Thus parenthood gave the teenage mothers an entry to adulthood (Preston-Whyte & Zondi, 2002).Prater (2002) sta ted that teenage pregnancy and subsequent parenting could create major obstacles to any learners achievements at school. Thus, pregnant learners are impaired by their situation. Even though they have as much potential for academic success as their non-parenting cohorts, there are multidimensional causes for their academic failure. Many investigations have shown that early pregnancy hinders educational attainment. Erikson (2004) reported that teenage mothers exhibited a syndrome of failure, which included a failure to remain in school. Pregnant learners are more likely to drop out of school for at least an academic year.The dual role of being a mother and a learner is stressful (Parekh & De La Rey, 2007) and impinges on school achievement. School attendance, is also fed up(p) by such things as babysitting arrangements and the health of the child. Furstenberg et al. (2007) referred to what is termed role foul. He defined role overload as the strain that exists when the teenage mo ther simultaneously attempts to meet the demands of parenting and schooling. Parenting learners cannot participate in experiences enjoyed by their peers, for example, extra-curricular activities, which can add much value to the total school experience of most teenagers.Despite these hardships schooling emerged as important (Prater, 2002). Depression has been correlated with teenage pregnancy (Hamburg, 2006). Parenting teenagers are more likely to present with higher levels of depression when compared with non-parenting adolescents and older mothers. In most literature psychological distress among adolescent mothers is perceived as resulting from psychosocial stressors related to the adjustment into the role of being the mother (Kalil & Kunz, 2000). In some literature it is argued that teenage girls are predisposed to depression (Galambos, 2004).It is postulated that teenage girls are more prone to experiencing mothers of the same ethnic and socio-economic status had similar fin dings (Field et al. , 2006 Hudson & Ineichen, 2001). It was found that infants of teenage mothers are more likely to bring less verbal stimulation and to have developmental delays. These negative effects were associated with the fact that teenage mothers had limited knowledge of developmental milestones and held punitive child rearing attitudes. Literature concludes that teenage mothering is contributory to poor cognitive development of the child.Low education levels of the mother, poor socioeconomic status and negative attitudes towards child rearing are correlated with the childs poor developmental outcome (Field et al. , 2006). Cunningham and Boult (2006) also postulated that the young mothers immaturity, social inexperience and lack of child rearing skills have a negative effect on the child. The young mother and her off-spring are at a risk of becoming victims of crime like incest, rape, neglect, abuse, family violence and of liaison in criminal activities such as drug tra fficking, prostitution etc.In the Ghanaian context the teenage mother often resides in her parental home (Preston-Whyte & Zondi, 2002) and the child is often in the handle of an adult during the day either the grandmother or at an alternate(a) day care. This implies that the child of a teenager is more than likely to receive parenting from an adult mother figure and to benefit from this interaction (Camerana et al. , 2008). Multiple care giving has also been found to be of benefit for the mother. While an adult is looking after the child, the mother gets the opportunity to attend to other responsibilities thus alleviating the stressors for the mother.

Traders- Risk, Decisions and Management

70+ DVDs FOR SALE & EXCHANGE www. plentyrs-softw atomic payoff 18. com www. forex-w arz. com www. commerce-softw be-collection. com www. levelheaded dealstation-d throwload-free. com Contacts email&clx protected com email&160protected ru Skype andreybbrv principalS This page by choice left blank TRADERS finds, Decisions, and c argon in m angiotensin-converting enzymetary food marts Mark Fenton-OCreevy Nigel Nicholson Emma Soane Paul Willman 1 Great Clar curiosityon Street, Oxford ox2 6dp Oxford University shake up is a department of the University of Oxford.It furthers the Universitys objective of excellence in research, scholarship, and education by publishing conceptionwide in Oxford New York Auckland Cape T cause Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai detonator of Taiwan Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy lacquer S starth Korea Poland Portugal Singapore Switzerland Thailand Turkey Ukraine Vietnam Oxford is a registered trade mark of Oxford University Press in the UK and in certain diffe holdwise countries Published in the united States by Oxford University Press Inc. New York Oxford University Press 2005 The moral rights of the author head hold been asserted infobase right Oxford University Press ( throw pastr) First published 2005 All rights reserved. No part of this publication whitethorn be reproduced, stored in a recuperation system, or transmitted, in virtu all in ally(prenominal) form or by whatever means, with bulge out the prior permission in writing of Oxford University Press, or as expressly permitted by law, or under terms agreed with the appropriate reprographics rights organization.Enquiries concerning genteelness outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the purpose above. You must non circulate this platter in any(p renominal) other binding or c e rattlingplace and you must impose this like find out on any acquirer. British Library Cataloguing in Publication selective schooling Data available Library of Congress Cataloging in Publication Data Data available ISBN 0199269483 3 5 7 9 10 8 6 4 2 Type put up by Newgen Imaging Systems (P) Ltd. , Chennai, India Printed in Great Britain on acid-free composing by Biddles Ltd. Kings Lynn, Norfolk Ac acquaintancements We gratefully acknowledge the help of the coronation banks which co occupyd in this research and provided ? nancial support, and the Economic and Social look Council which provided funding as part of the Risk and Human Behaviour Programme (grant number L211252056). We be especially grateful to the traders and managers who gave us their term and sh bed their generaliseing. This page intentionally left blank Contents List of Figures List of Tables viii ix 1INTRODUCTION traders, trade places, and Social Science 1 10 2 THE GROWTH O F financial MARKETS AND THE ROLE OF TRADERS 3 ECONOMIC, PSYCHOLOGICAL, AND SOCIAL EXPLANATIONS OF MARKET BEHAVIOUR 4 TRADERS AND THEIR THEORIES 5 A FRAMEWORK FOR UNDERSTANDING TRADER PSYCHOLOGY 6 attempt TAKERS Pro? burbot Traders 28 51 74 110 whizz hundred forty-five 178 197 212 221 237 7 8 9 10 BECOMING A TRADER MANAGING TRADERS CONCLUSIONS APPENDIX The Study References Index List of Figures 2. 1 2. 2 2. 3 3. 1 3. 2 4. 1 4. 2 5. 1 5. 2 6. 1 6. 2 6. 3 6. 4Post-war UK faithfulness commercialize growth Post-war US equity commercialise growth planetary growth in nonprescription(a) contrastiveial coefficients expect utility supposition Prospect theory The consanguinity surrounded by fortune and turn in Idealized trader attempt pro? les RAT Screenshot dissemination of traders illusion of control scores A model of individual insecurity behaviour Comparisons of manybodyality scores by occupational mathematical group Risk propensity, happens takennow and past Compa risons of endangerment propensity scores by occupational group 7. 1 C arer mobility to date 7. 2 standardisedliness of a career change in the next 5 geezerhood 8. Introducing incentive and monitoring effects to prospect theory bittie talkary of attempt behaviour 14 15 16 40 41 55 63 104 106 117 132 136 138 174 175 194 List of Tables 6. 1 Risk taking mogul 6. 2 Personality demonstratetssigni? weight residuals between occupational groups 6. 3 Relationships between RTI and Big five-spot personality factors 6. 4 Relationships between RTI and Big Five personality sub oercomes 6. 5 Regression on total remuneration 8. 1 Controls and incentives associated with framing effectsempirical ? ndings 10. A1 Investment bank sample pro? le 10.A2 Personality and jeopardize propensity sample pro? le 10. A3 Frequencies of self-ratings of performance 131 133 138 140 143 193 214 215 218 This page intentionally left blank Chapter 1 INTRODUCTION Traders, Markets, and Social Science I grew up in a small town in Florida and none of this stuff really exists like stocks and bonds and things like that. No one I ever k bare-assed-made growing up did this sort of thing and to me it all becharmms like a fantasy universe whatsoever quantify and its sincerely abstract. You know, I rationalize to my mother what I do and I gouget, you potbellyt put it into words, it in effect(p) doesnt devise any smell.You alonet end read alike Portfolio Management QuizzesI am so removed from the daily life of the average person that I mean at whatsoever point this has got to come to an end. Whether I really believe that or non I wear downt know unless in my head I tolerant of commend this is all fantasy land and one day Im going to wake up and Im going to swan I had the most amazing dream, Ive been shapeing on some place called Wall Street, that paid me lots of money and I save sat somewhat and looked at computers all day and put these pieces unitedly and everything turn tailed out and it was all a lot of fun. So in my mastermind thats kind of what I think.Derivatives Trader, ? rm B We live in a field that is shaped by ? nancial commercialise places and we are all pro primely touch by their operation. Our employment prospects, cornerstone our ? nancial security, our pensions, the stableness of political systems and reputation of the parliamentary law we live in are all greatly in? uenced by the operation of these commercializes. The power and wideness of international ?nancial commercialize places and the traders who inhabit them has grown dramatically in the past few decades. The level of ? nancial ? ows in these food food foodstuffs stinker get up to sooner staggering levels.For example, in the day before the setting of incoming exchange rates to the Euro, trades in currencies entering the Euro totalled close ten measure World gross domestic product (GDP). At any one time, not bad(p) derivatives contracts pitch a total cling to of around quadruplet quantify World GDP. Professional traders ? gure prominently in media accounts of the chokeings of ? nancial securities industrys and the economy. television set risings bulletins on the economy or stock securities industry browsely include interviews with senior traders, or footage of a barter ? oor. Stories around page traders are big news.The decisions of individual traders are oft chatn as having the voltage to move markets and see national economies. Yet, the function of the master copy trader is colossally absent from mainstream ? nancial sparing accounts of markets. Professional traders, we argue, inhabit a b browseland in markets where some of the orthodox suppositions of ef? cient, forthwith adjusting expenditures break-down. They are a good dealtimes well rigid to cultivate market im utter(a)ions, by virtue of lower consummation costs, entrance to inner(a) reading, critical mass, or trademarked knowledge and mod els.However, at the comparable time, they work in a fast-moving landscape of echo, rumour, unreliable instruction, and uncertainty. Thus, it is often dif? cultus to de cry whether an opportunity is real or illusory. This is a book intimately passe-partout traders in this vociferous borderland what they do, the kind of nation they are, how they encompass the valet de chambre they inhabit, how they make decisions and take chances. This is also a book more(prenominal) or less how traders are managed and the institutions they inhabit ? rms, markets, cultures, and theories of how the homo works. Our approach to writing this book is explicitly interdisciplinary.We draw on psychology, sociology, and political economy in order to illuminate the work of traders and their world. Our focus is traders and the ? rms they work in. It is not the purpose of this book to mount an grand critique of the dominant quick of scent sparing account of ? nancial markets, nor 2 approach is markets our cardinal focus. We are concerned principally with s squirting the world of the master key trader. However, we do believe our work is applicable to an rationality of ? nancial markets. First, in order to come across the role and work of the trader, it is of the essence(predicate) to understand that the neoclassic figure of ef? ient markets and rational set breaks down at the margins and that master copy traders both bene? t from and contribute to this departure from orthodox ? nancial stinting theory. Second, the ef? cient markets paradigm rests on the assumption that in the absence of uniformly rational investors, on that point is a suf? cient group of rational investors who are able to drive out pricing anomalies by means of trade. 1 Professional traders in investment funds banks seem good bottom of the inningdidates to laugher this role. Hence, the distinguish that we present on the ways in which traders can incline signi? antly from rational stintin g norms of behaviour may be fruitful in helping to explain market phenomena. 1. 1 Our Work and How It Informs the Book This book is based on a study of traders in ? nancial shafts in quad freehanded investment banks operating in the City of capital of the United Kingdom. Over the air line of 1997 and 1998, we carried out interviews with 118 traders and trader managers in four large City of capital of the United Kingdom investment banks and collected qualitative and quantitative data on their roles, behaviour, performance, and psychological pro? les. We carried out attach toup interviews in 2002. We use detailed quotations from the interviews end-to-end the book. Where we use these quotes they are presented verbatim. We had leash main concerns. First, we came to the study with a fast interest in decision devising and risk. While all business is concerned to some accomplishment with risk, investment banks and ? nancial traders are almost unique in the extent to which their w ork is founded on the management of risk and the extent to which they must make decisions somewhat risk. Second, in the vast literature on ? nancial markets comparatively humble circumspection has been paid to the role of ? ance nonrecreationals in these markets and we wanted to redress this. 3 Introduction Third, we viewd that the large literature on markets and the (somewhat slimmer) literature on traders are marked by very variant approaches and paradigms in ternary branches of the mixer sciences economics, sociology, and cognitive and social psychology. We wanted to bring together the insights of these different disciplines. Throughout the book we draw both on the data we self-possessed in this study and on the insights of prior research and literature in ? nancial economics, psychology, and the sociology of markets.We turn now to those literatures. 1. 2 Traders in the Social Science books Neoclassical monetary Economics pecuniary economics is a relatively young dis cipline. The origins of modern (neoclassical) ? nancial economics are often located in the early 1950s in the work by Markowitz (1952) on portfolio theory. During this gunpoint, ? queer moved from a concern with describing the activities of actors in ? nancial markets to the construction of parsimonious models of markets founded on assumptions of rational investor behaviour. The central organizing idea of neoclassical ? nancial economics is the ef? ient markets possibility, which holds that set changes are basically a random walk. All new schooling applicable to prices is incorporated into prices straight off (Fama, 1970). This central proposition and some(prenominal) of the theory which springs from it is founded on the idea that any asset which is not rationally priced provides opportunities for pro? t, which ordain be instantly taken up and cause prices to converge to the rational level (i. e. trade). This assumption is both illustrated and lampooned in the ? cigaret joke astir(predicate) both ef? cient market theorists who pass a $50 bill trickery in the street.They leave it untouched and congratulate each other on realizing that if it presented an opportunity for pro? t someone else would study picked it up already. charge the strongest proponents of the ef? cient markets hypothesis do not claim that it represents a good description of the behaviour of individuals in markets. quite it is claimed to be a good tolerable description, which should be judged on its predictions alternatively than its assumptions. 4 Introduction Fama (1970), who set out an early comprehensive account of the ef? cient markets paradigm, has more new-madely suggested that Like all models, market ef? iency (the hypothesis that prices fully re? ect available reading) is a faulty description of price formation. Following the standard scienti? c rule, however, market ef? ciency can provided be re secular by a wear out speci? c model of price formation, itself potentialityly rejectable by empirical tests. (Fama, 1998 284) The ? nance professional is largely absent from orthodox ? nancial economic accounts of markets. The assumption of ef? cient markets, with no allow study held by any investor, leaves little room for an account of how professional investors might make intermit than market returns.However, more recently, in that respect has been an improver interest at bottom ? nancial economics in explaining empirically observed departures from the predictions of the ef? cient markets hypothesis and rationaleconomic pricing theories. Many of these fall in the acclivitous ? eld of behavioural ? nance. What has allowed consideration of the role different types of investor might depend in markets is the growing recognition that abruptly ef? cient markets are not an impulsive consequence of the existence of traders an idea that has been captured eloquently by Lee (2001 284).I hire that moving from the mechanics of arbitrage to the ef? cient markets hypothesis involves an enormous leap of faith. It is akin to accept that the ocean is ? at, simply because we affirm observed the forces of gravity at work on a glass of water. No one questions the effect of gravity, or the fact that water is always desire its own level. But it is a stretch to infer from this observation that oceans should look like millponds on a s manger summer night. If oceans were ? at, how do we explain predictable patterns, such as tides and currents? How can we account for the existence of waves, and of surfers?More to the point, if we are in the business of training surfers, does it make sense to begin by assuming that waves, in theory, do not exist? A more measured, and more descriptive, program line is that the ocean is constantly act to become ? at. In reality, market prices are buffeted by a continuous ? ow of randomness, or rumours and innuendos disguised as learning. Individuals reperforming to these signals, or pseudo-signals , cannot fully calibrate the extent to which their own signal is already 5 Introduction re? ected in price. Prices move as they trade on the seat of their imperfect informational endowments.Eventually, through and through trial and error, the aggregation motion is completed and prices adjust to fully tell the involve of a crabby signal. But by that time, many new signals lead arrived, ca utilise new turbulence. As a result, the ocean is in a constant earth of restless(prenominal)ness. The market is in a continuous state of adjustment. Lee argues that the alliance between inef? cient pricing and arbitragers may be like piranha run dynamics. In equilibrium at that place must be both predator and prey. Similarly, in equilibrium at that place testament be both arbitragers and arbitrage opportunities in the market place.There is other essential way in which ? nancial markets are widely accepted as departing from the ef? cient markets paradigm. Investors trade ofttimes more often than the theory suggests they should. More recent ? nancial economics accounts often describe two types of investors noise traders and smart traders (a recent example is Daniel, Hirshleifer, and Teoh, 2002). Noise traffic is employment on the basis of information that is either irrelevant to price or has already been cuted by the market. Smart traders are those who act rationally, trading only if on the basis of genuinely new and relevant information.This distinction is sometimes taken to map on to the difference between naive investors and train professional investors (e. g. Ross, 1999 Shapira and Venezia, 2001). Behavioural Finance There has been change magnitude interest within the ? eld of ? nancial economics in using what is known active coherent yieldes in human cognition to explain departures of market behaviour from the predictions of ef? cient markets theory. conjointly known as behavioural ? nance, these models and empirical studies generally undertake t o explain market behaviour that departs from the predictions of orthodox ? ancial economics by reference to opinionated cognitive bias among investors or most-valuable subgroups of investors. 3 Behavioural ? nance draws heavily on work from behavioural decision-making, a branch of psychology concerned with modelling human decision-making processes. While, in the main, this literature does not distinguish between professional traders and other investors, there stimulate been 6 Introduction some attempts to compare the susceptibility to biases of ? nance professionals to that of the wider population.For example, Shapira and Venezia (2001) found professional brokers less susceptible than independent investors to one common bias, the disposition effect (a bias towards carrying stocks more promptly to realize gains than to realize losings), although they were not resistive to the bias. In an experimental study Anderson and Sunder (1995) compared the behaviour of laboratory markets dwell by experienced commodity and stock traders with the behaviour of markets populated by MBA student traders. They found the amount of trading experience to be an important determinant of how well market issues approximated (ef? ient market) equilibrium predictions. Student traders markets exhibited departures from rational prices founded in common cognitive biases plot bias levels in markets with experienced traders were good lower. However, as we explore in Chapter 5, our own research offers evidence that professional traders are just as susceptible as other groups to some forms of bias, with important consequences for their behaviour and performance. Sociology of Markets Sociologists interested in markets select paid rather more attention to the role of professionals than pack ? ancial economists. Unlike ? nancial economists who take markets to be innate(p)ly occurring, sociologists tend to stress the social embeddedness of markets and the ways in which they are sustain ed as social institutions through active intervention and regulation. hotshot important strand of work is concerned with the social networks that operate within markets and in feature the ways in which professionals within markets act through these social networks and exercise informal sanctions over participants departing from accepted norms of behaviour (e. g.Baker, 1984a Abola? a, 1996). Research by ? nancial economists also demonstrates the signi? cant effect the detailed structure and fundamental law of markets4 can feature on the ? ow of information, liquid, and prices (e. g. Amihud, Mendelson, and Lauterback, 1997 Lipson, 2003). Others have been concerned with the nature and consequences of ? nancial economic theory. Traders, from this perspective, do not simply inhabit markets they enact them. That is, the beliefs they hold 7 Introduction roughly the nature of markets affect those markets in non-trivial ways.MacKenzie (2002), for example, describes how the adoption of the scorchScholes equation for option pricing by traders did not simply change more effective pricing of options, but helped to bring almost conditions that better ? tted the assumptions on which it was based. The close empirical ? t between the predictions of the equation and options prices was bought about, at to the lowest degree in part, by the use of the equation to identify arbitrage opportunities. The empirical ? t has deteriorated subsequently as beliefs have changed to incorporate, inter alia, changed beliefs about the likelihood of market crashes.We pick up this theme of the re? exive relationship between beliefs and markets in Chapter 4. 1. 3 Overview of Book Chapters 2 and 3 set the context for our study and exploration of the role of traders. Chapter 2, The fruit of financial Markets and The usage of Traders, considers the growth of international ? nancial markets in a historical context and outlines the role investment banks and professional traders have come t o play. In Chapter 3, Economic, Psychological, and Social Explanations of Market Behaviour, we take a more detailed look at differing economic, psychological, and social explanations of market behaviour.Chapter 4, Traders and Their Theories, considers the nature of traders knowledge and the interplay between their subscriptions to theories of the way the world works founded in neoclassical ? nancial economics and their more particularist and idiosyncratic theories of how to work the world. Chapter 5, A Framework for Understanding Trader Psychology, starts by outlining a psychological model of the trader founded in a selfregulation framework. It draws on the qualitative and quantitative evidence that we have about trader decision-making and bias. It challenges the ? ancial economics dichotomy between rational and non-rational and explains the different rationalities that arise as a consequence of internal goal states. We also present evidence on the vulnerability of traders to contro l illusions and the consequences for their performance. 8 Introduction Chapter 6, Risk Takers Pro? ling Traders presents a new model of risk taking that parades how trader behaviour emerges from a web of circumstantial and individual causes. The remainder of the chapter explores these individual differences in greater wisdom, especially how personality meetings different kinds of risk taking and decision-making.The chapter explores what kinds of sight traders are, focusing particularly on personality and risk propensity, but also drawing on what we know about their demographics and background. Chapter 7, Becoming a Trader, uses a career transitions framework and a model of social information to frame trader discipline and entry into a community of trading practice. We examine the ways in which they both learn and construct knowledge about the process of trading. In Chapter 8, Managing Traders, we explore the ways in which traders are monitored and managed within investment ban ks.We highlight the fact that traders are often not managed at all, so much as monitored. Our concluding chapter (Chapter 9) draws together the implications of our ? ndings for traders, their management and regulation, and for further research. Notes 1. Arbitrage purchasing currencies, securities, or commodities in one market for resale in others in order to pro? t from price differences. The effect of arbitrage is to act as a mechanism to bring about convergence of prices in different locations and markets or between equivalent securities. . A more detailed account of the sample and methods is refundn in the appendix. 3. We give a more detailed treatment of behavioural ? nance arguments in Chapter 3. 4. Often referred to as the institutional microstructure. 9 Chapter 2 THE GROWTH OF fiscal MARKETS AND THE ROLE OF TRADERS Hardly a day passes without newspapers and television scarpering a flooring about ? nancial markets and their impact on our lives. Even a casual perusal of the se news stories makes it apparent that the activities of ? ancial institutions and markets have come to play a central role in our economic well-being and security whether through their organise impact on individual investments and pensions or through their pervasive impact on the level of economic operation within nations and across the globe. The persist decade of the twentieth century was marked by a serial publication of international ? nancial crises. These underlined both the interdependence of national economies and ? nancial markets and the global scope of those markets. fiscal crises in Latin America, the Asian Tiger economies, and Russia highlighted the bucket a coarse at which capital can ? e reaping of Financial Markets countries in which investors have disordered con? dence and the impotence of national governments to control such out? ows. The impact around the world of these crises on economies and ? nancial institutions demonstrated the highly interconnected nature of ? nancial markets. In the same period a number of ? nancial institutions suffered very signi? cant ? nancial losses as a consequence of the actions of single traders. One of the scoop up publicized of these was Nick Leesons role in bringing about the collapse of Barings Brothers, in 1995.The collapse of Barings caused Alan Greenspan of the US Federal Reserve to comment that It is probably fair to say that the very ef? ciency of global ? nancial markets, engendered by the fast proliferation of ? nancial products, also has the capability of transmitting mistakes at a far fleet pace end-to-end the ? nancial system in ways that were unknown a generation ago . . . Certainly, the recent Barings Brothers episode shows that large losses can be created quite ef? ciently. Todays technology enables single individuals to bug out massive motions with very rapid execution.Clearly, not only has the productiveness of global ? nance increase markedly, but so, obviously, has the abil ity to generate losses at a previously inconceivable rate. Moreover, increasing global ? nancial ef? ciency, by creating the mechanisms for mistakes to ricochet throughout the global ? nancial system, has patently increased the potential for systemic risk. (Greenspan, 1995) While the behaviour of individual traders has at times seriously shamed the ? rms they work for, individual ? nancial institutions have also shown the capacity to endanger the stability and operation of ? nancial markets around the world.In 1998, the collapse of Long Term Capital Management, a hedge fund holding positions in ? nancial derivatives with a notional time value of $1,250 billion seriously endangered the stability of the worlds ? nancial systems. How could a single trader bring down a bank? How could a single hedge fund threaten the stability of the worlds ? nancial systems? The closure lies in the way in which derivatives allow for the multiplication of market risks (and returns). The very boasts that make derivatives1 so useful as a turncock for managing risk provide for the possibility of massively increasing risks.In this chapter, we argue that the role of ? nancial markets, in both world and national economies, has increased dramatically. 11 gain of Financial Markets The potential, and sometimes actual, impact of individual traders on ? rms, markets, and economies is enormous. In the following(a) chapters we show that ? nancial markets are neither as rational nor as natural as ? nancial economists paint them and that we need to bring a wider range of social science theory to bear on understanding traders, their ? rms, and the markets they operate in.As we show below, the current globalization of ? nancial markets is not new but simply the modish of several cycles of international ? nancial integration over two millennia. In particular, the recent growth in international ? nancial markets could be seen as a return to levels of international ? nancial integration seen at the end of the ordinal century and interrupt by a period, which included two world wars and the Great Depression. However, the depth and scale of these markets does seem to be different this time and the emergence of new forms of ? ancial instruments, derivatives, capable of massively multiplying possible risks and returns has led to a qualitative difference in the potential impact of individual actions on institutions, markets, and economies. 2. 1 A Brief Hi floor of Financial Markets International ? nancial markets are not a pu intrust modern phenomenon. Basic forms of ? nancial exchange can be found throughout recorded history and international ? nancial systems are known to have existed two millennia ago. Historical evidence suggests that there have been a series of cycles of international ? nancial integration (Lothian, 2002).In the three centuries following the collapse of the Roman Empire, currencies were very unstable and constantly debased. However, in the fourth-ce ntury AD, the Emperor Constantine introduced a stable cash coinage, the bezant (also known as the nomisa or solidus). This became widely used throughout the Mediterranean region. It was produced in Byzantium till the thirteenth century and kept more or less the same gold content through till the el veritable(a)th century. Until the introduction of the dinar in the Muslim world in the seventh century, it had no competitors as an international medium of exchange.While records are patchy, it is urinate that the existence of a stable medium of international 12 product of Financial Markets exchange during the period between the fourth and eleventh centuries allowed quite sophisticated ? nancial transactions to take place (Lopez, 1986 Lothian, 2002). The thirteenth century was another period of growth in international trade, both within europium and between Europe and other parts of the world. Much of this was organized around regular international trade fairs (most notably at Champag ne and Brie).This period was marked by the growth of an extensive and sophisticated banking system and by the education of ? nancial instruments such as bills of exchange (which acted jointly as a credit and foreign exchange transaction). It is clear from the records of the dominant northern Italian banks of the time that not only were there quite sophisticated foreign exchange markets, but also that arbitrage was a common activity (Lothian, 2002). During the fourteenth century the importance of these trade fairs and the Italian banks declined. By the ? fteenth century, capital of The Netherlands was the more important centre of ? ancial activity. The sixteenth century saw the development, in capital of The Netherlands, of negotiable ? nancial instruments such as discounting commercial paper and, by the ordinal century, the development of perpetual bonds, futures contracts, make outing short, and other such ? nancial instruments and techniques that would be well recognized in m odern ? nancial markets (Homer and Sylla, 1996 Lothian, 2002). By the start of the eighteenth century, the capital of The Netherlands rallying, the centre of Dutch trading, had become a world market in which a wide range of commodities and securities were traded.During this period, London took on increasing importance as a centre for international ? nancial trade. With the establishment of the Bank of England and the London Stock deepen and the intervention of the Napoleonic wars, London came to eclipse Amsterdam as a ? nancial centre by the start of the nineteenth century. The nineteenth century saw a marked expansion of international trade and further development of ? nancial markets. The growth of the US economy drove much of this expansion. The New York Stock Exchange was established in 1817 and by the end of 1886 it hit its ? st day on which more than a million portions were traded. By the late 1920s New York had overtaken London as a world ? nancial centre. However, the ear ly twentieth century, a period that included two world wars and the Great Depression, saw the collapse of international 13 Growth of Financial Markets trade and the rise of national regulation and controls on international ? ows of capital, which in effect unwound the integration of international ? nancial markets. Rajan and Zingales (2003) show that on a range of indicators of ? nancial development including stock market capitalization as a likeness of GDP, world ? ancial markets did not regain their pre-war (1913) levels until the late 1980s. The stake half of the twentieth century once again saw a very substantial increase in international ? nancial integration. As we have seen, there is historical evidence that the current period of globalization of ? nancial markets is not a new phenomenon. Rather there have been cycles of high international integration of markets interspersed with periods of low integration throughout the last two millennia. However, it is also clear that wi th each new cycle the nature and depth of those markets has been changing. Changes in the sophistication of ? ancial instruments and technologies, and changes in communication theory and information technologies have all been important factors in? uencing the scale and complexness of ? nancial markets. The period since the 1970s has seen a very substantial increase in the size of ? nancial markets. Figure 2. 12 shows the increase in annual 2500 honor of annual turnover (? billion) 2000 30 1500 25 20 degree centigrade0 15 10 5 0 1965 0 1970 1975 1980 1985 Year 1990 1995 2000 40 lean of bargains (million) 35 Value Reported trades 500 Fig. 2. 1 Post-war UK equity market growthUK equity turnover 19652002 showtime London Stock Exchange. 4 Growth of Financial Markets Value of annual turnover ($ billion) 12000 10000 8000 6000 4000 2000 0 1967 Value Reported trades 600 500 400 300 200 100 0 2002 Number of bargains (million) 1972 1977 1982 1987 Year 1992 1997 Fig. 2. 2 Post-war US equit y market growthNew York Stock Exchange equity turnover 19672002 inception New York Stock Exchange. value of shares traded on the London Stock Exchange between 1965 and 2002. Figure 2. 2 shows the change in annual number of shares traded on the New York Stock Exchange between 1960 and 2002 and the annual value of shares traded from 1985.Both markets show exponential growth over the period, but the real story over the last decade is the growth in derivatives trading. By 2002, outstanding over-the-counter derivatives3 (OTC) contracts had a notional value of $128 trillion, around four times greater than total world GDP. Figure 2. 3 shows the growth in number of active contracts between 1992 and 2002. Much of the recent concern about systemic risks in markets has centred on the role of derivatives. All ? nancial investments carry risk. However, there is a difference of degree with derivative trading.They involve contracts which are item on the price of primal assets and because of the way in which trades are regulated, derivatives4 enable investors to speculate on the price of an asset while only depositing a small proportion of the underlying asset price (margin requirements) (Zhang, 1995). In other words, the ? nancial risk borne in an options trade may be many times the money actually deposited to make the trade. Financial ? rms which do not have sophisticated control mechanisms to manage their exposure to derivatives risk may 15 Growth of Financial Markets 000 Gross market value ($ billion) Gross market value 6000 5000 4000 3000 2000 1000 0 92 93 94 95 96 97 98 99 00 01 19 19 19 19 19 19 19 19 20 20 20 02 160 000 Notional amounts 120 000 100 000 80 000 60 000 40 000 20 000 0 Notional amounts ($ billion) 140 000 Fig. 2. 3 Global growth in OTC derivativesglobal value of outstanding contracts Source 20002, Bank for International Settlements 19949, Swaps Monitor publications Inc. unwittingly ? nd themselves exposed to potential losses greater than the total ? rm assets. Such risks can emerge very rapidly in the course of trading and require depth psychology of the hearty ? ms current portfolio of trading assets in real time to identify potential overexposure to market risk. Of course, the leveraging effect of derivatives does not only affect market risk but also ampli? es risk in the other categories. For example, since derivatives typically have greater volatility than the underlying asset, even a short period in which a ? rm is unable to trade (say due to computer failure) could result in signi? cant risk exposure. The complexity of some derivatives may mean that managers are ill-equipped to understand the trades dealers are engaging in, increasing behavioural risk (Chorafas, 1995 16).In evidence presumption to the US House of Representatives, George Soros, a highly successful ? nancial speculator, said of derivative instruments There are many of them, and some of them are so esoteric, that the risks come to may not be properly unde rstood by even the most sophisticated of investors. Some of these instruments appear to be 16 Growth of Financial Markets speci? cally designed to enable institutional investors to take gambles which they would otherwise not be permitted to take. For example, some bond funds have invested in synthetical bond issues that carry a 10 or 20-fold multiple of the risk within de? ed limits. And some other instruments offer exceptional returns because they carry the seeds of a total wipe out. (Soros, 1995 312) 2. 2 The Role of Investment Banks in Financial Markets To understand the role of modern investment banks it is undeniable to understand how world ? nancial markets have come to be dominated by an American model of ? nance. Much as Byzantium, Lombardy, Amsterdam, and London have been the dominant centres of ? nancial intent and power in previous eras, US ? nancial markets and institutions are today.The central feature of the US model that emerged in the post-war years was the declin e of relationship banking and the increasing commoditization of ? nancial products and serve. The roots of this system lie in the unintended consequences of anti-trust and banking legislation passed in the United States during the 1930s. The segregation of commercial and investment banking in the United States fixed the foundation for the development of a strong investmentbanking sector. The fragmentation of the banking industry, imposed by legislation, created conditions in which ? ancial transactions were more readily managed through markets than within large banks. The elimination of ? xed armorial bearings for broking ? nancial instruments in 1975 provided a further impetus for competition. More and more, ? rms seeking to raise ? nance looked to impersonal markets rather than relationships with banking institutions. Progressively more unreserved and liquid markets in both corporate debt and equity and the corresponding increased competition in these markets served as a signi ? cant stimulus to ? nancial innovation.As these markets genuine it became apparent to market participants and to the government that effective market operation could only be maintained through active intervention and regulation. A series of waves of outside(a) and self-regulation, often in response to market crises, led to the development of regulations and supervisory arrangements designed to contain insider manipulation of markets and ensure free 17 Growth of Financial Markets ? ow of information. On the demand side, the expansion of institutional investment (insurance, pensions, and mutual funds) stimulated and was stimulated by the growth of these ? ancial markets. The slower growth of ? nancial markets and institutions in other parts of the world meant that, as other countries began to follow the United States in opening up competition, US ? nancial institutions were well placed to play a major role. In the wake of the major changes in market regulation in 1986, the long-est ablished London merchant banks were swept away by the US-based investment banks and non-US owned European investment banks have progressively adopted US approaches. The principal competitive return of American ? rms lay in their expertise in managing risk (Steinherr, 2000 49).Investment banks manage risk in four main ways they absorb risk for clients, they act as intermediaries for the diversi? cation of risk, they advise on the management of risk and they engage in trademarked tradingtaking risk on their own account in the pursuit of returns (Casserley, 1991). Absorbing Risk Investment banks absorb risk for clients in a number of different ways. For example, when they act on behalf of a client they absorb credit risk (the risk the client pass on neglect on payment for the transaction and they are unable to unwind the transaction at a favourable price).They underwrite issues of securities (e. g. commercial paper5 to cover shortterm ? nancing needs), guaranteeing to deal from the client at a ? xed price should the security fail to get through its expected price in the open market. They also play an important risk absorption role in trading markets. In some of these the bank depart act as a market-maker,6 providing liquidity in a particular ? nancial instrument. The bank ? xes prices at which it will vitiate or portion out a ? nancial instrument and stands ready to buy or sell at those prices even if there is no party to pass the transaction on to immediately.In return for the spread between these prices the bank absorbs the risk of the market moving against them. Risk Intermediation In other crusades the bank will act as an intermediary for the diversi? cation of clients risk. This may be by acting as an intermediary in trading 18 Growth of Financial Markets markets or by putting together complex OTC deals that rely on aggregating (or disaggregating) ? nancial instruments provided by third parties. The banks bene? t from this intermediation work in two principal ways. First, they charge commission and second, they have access via their customers to information about order ? ws in the markets in which they operate. Such ? ow information provides opportunities to solve temporary market imperfections and pro? t through trading on their own account. Risk Advice The risk advice role overlays risk absorption and risk intermediation. For example, the bank may play an important advisory role associate to underwriting activities or in putting together a complex OTC deal. The role of the bank in providing risk advice to clients rests not just on skilful skills and experience in managing risk, but also in a (sometimes) greater overview of the markets in which they operate.An important issue here is the tension between the banks desire to make pro? ts on its own account and to earn a return through providing effective advice and services to customers. This tension is re? ected to some extent in tensions which emerge in most banks betw een trading and sales desks. As we will see later in the book, banks vary in the priority they give to part customer needs versus seeking opportunities for returns through trading on their own account. 7 Proprietary Trading In providing services to customers, investment banks ca-ca up information on order ? ws, they develop expertise in valuing particular securities or in economic fundamentals in particular sectors or countries, they build copyrighted models of price behaviour and they build up data on historic behaviour of prices and relationships between them. This can place them in a better position to judge risks and returns than other market participants and opens up the possibility of earning good returns on their own account. This activity typically takes two forms short-term (often intra-day) trades designed to exploit knowledge of temporary price ? ctuations linked to ? ows of orders in the market and longerterm trades, often based on arbitrage (exploiting pricing incons istencies between different securities, markets, or time periods). 19 Growth of Financial Markets 2. 3 The Role Played by Traders The work of traders can be divided into three broad categories trading on behalf of customers, market-making, and proprietorship trading. 8 Traders acting on behalf of customers take the least risk on behalf of the bank, while proprietary trading potentially involves the greatest risk.However, in practice, the three spheres of activity often overlap. For example, a trading desk acting on behalf of clients may also have authority to take intra-day positions to bene? t from short-term price movements in the markets they operate in. Alternatively, in some circumstances, while not stringently acting as a market-maker, they may stand ready to create liquidity for important clients by buying or selling to those clients when they cannot ? nd a counterparty for their trades. As one senior trader told us We are paid to be on the wrong side of the market for our customers.If we have an institution that pays us thirty million dollars a year in commissions, we will, on occasion at their request, be a buyer for them when there are only sellers on the market or be a seller for them when there are only buyers. When theyre in a more normal market environment where there is plenty of liquidity and good two-way ? ow, they dont necessarily need our capital. In fact they prefer not to use our capital because all that does then is create another buyer or another seller in the market with them.But when the market is heavily tilted in one management than the other, even the markets selling off, there are much more sellers than buyers or a very strong market where there are much more buyers than sellers. Thats when they need us to abuse in and serve as that intermediary to facilitate the execution of their order. 9 Alternatively, a trading desk operating as a market-maker may comply this with some proprietary trading. One trader described the activit y of his desk We have a P&L pro? t and loss, budget of about $20m a year through plain vanilla market making with customers.However, we make about half the money in proprietary trading using the ? ow and information from customersputting it on our book instead of putting it back into the market. For the ? rst half of this year we were number one for turnover in our niche with between 10% and 15% of the market. The 20 Growth of Financial Markets more that number increases, the better information we would have for proprietary trading, but we would probably start losing money from the market making function because prices would have to be so keen, so there is a balance.Equally, traders mostly occupied in proprietary trading will seek opportunities to generate customer business I do proprietary business and Im supposed to be doing proprietary but I interface with the ? ow desk so I would be looking at customer business trying to generate customer business. My slant is proprietary but Im always trying to emphasise customer business using my positions. 2. 4 How do Traders Make Pro? ts? If, in ef? cient markets, price changes are essentially a random walk and all new information relevant to prices is incorporated into prices instantaneously (Fama, 1970), then how do traders make money? The ? st answer is that they charge commission for their intermediation and advisory role. By aggregating customer orders they can reduce transaction costs. However, as we will explore in Chapter 3, in practice, markets are not completely ef? cient and information asymmetries exist. Traders essentially earn economic rents10 by exploiting information advantages. These may come from a number of sources, including information on asset ? ows within markets (e. g. from having a large customer base) inside information on the economic basis for an asset price proprietary databases allowing more accurate calculation of probabilities (e. . historical asset volatility for pricing options) mod els of the relationship between prices and economic fundamentals models for extracting the information inherent in historical price changes of an asset and other colligated assets and effective understanding of the sentiment and likely behaviour of other market actors. All of these information advantages are potentially short-lived. The very act of trading may reveal information to other parties. Others may emulate models. Others may access the same sources of information.New information may wipe out the utility of earlier information. At the same time markets are in practice very noisy. That is to say, there is a lot of trading going on that is not based on information 21 Growth of Financial Markets genuinely relevant to the underlying value of an asset. Black (1986) noted in his presidential address to the American Finance Association that Traders can never be sure that they are trading on information rather than noise. What if the information they have is already re? ected in pr ices? Trading on that kind of information will be just like trading on noise.Traders can only earn above market returns, on average, over time, if they are genuinely trading on new and relevant information. However, on any individual trade it will be dif? cult to tell whether a positive outcome is the result of trading on information or of essentially unpredictable market movements (as a result of noise trading in the market, changes in sentiment, or new unexpected events). Similarly, for any individual trade it is dif? cult to forge whether a negative outcome is the result of trading on noise rather than information or the result of unforeseeable market movements.So it will often be the case that trading outcomes are not contingent on the traders strategy or information. Further, it will often be dif? cult to determine once an outcome is achieved whether the outcome was indeed contingent on a traders information and skill. While trading is a unsp anointed activity, many trading o utcomes are not contingent on skill. At the same time traders are highly motivated to establish causative relationships between information they hold and prices, since a signi? cant source of rent for any trader is the capacity to establish contingent relationships before others observe them.This problem of determining the links between behaviour and outcome for traders is one we will return to repeatedly in the book. While the detail of different trading strategies is not our principal focus, we describe some common trading approaches to set the stage for our later discussions. In order for traders to achieve better than average market returns, it is not suf? cient that markets are imperfect it is also necessary they have some competitive advantage relative to others who seek to exploit those imperfections.Within this fast-moving and uncertain world, traders adopt a variety of strategies to exploit the information and expertise to which they have access. These can be divided into four main categories insider strategies, adept strategies, fundamental strategies, and ? ow strategies. 22 Growth of Financial Markets Insider Strategies Insider strategies involve achieving advantage by exploiting privileged access to information (Casserley, 1991). Of course, some such strategies are under-the-counter. It is, for example, illegal to exploit privileged access to advanced knowledge of company lucre news or potential takeovers.However, most of these strategies are concerned with perfectly legitimate attempts to build an information advantage over rivals. The extent to which it is possible to achieve such information advantages varies signi? cantly from market to market. For example, in relatively rudimentary markets such as the emerging markets there may be frequent and persistent information asymmetries. In these circumstances, traders who are able to establish good personal networks may build an advantage, which enables them to anticipate price movements. Howeve r, in mainstream equities markets, the speed and ef? iency of information dissemination may make such advantages dif? cult to achieve. Insider strategies can improve a traders ability to anticipate market movements. However, as we noted earlier, it is often dif? cult or impossible for a trader to determine whether they have a genuine information advantage or whether their information is simply noise, already discounted by the market. Technical Strategies If markets are perfectly ef? cient, then historic prices contain no information that can be used to infer future price movements. However, many traders claim to do just that.They seek to exploit market imperfections through the psychoanalysis of past price information. One form of technical trade concerns using patterns in price data to identify likely turning points in price shortens (charting). Traders seek to identify trends early, buy into those trends and exit before the trend breaks. Many traders consider these patterns and trends in market prices to be determined by underlying investor sentiment. While there is some evidence that supports the existence of exploitable patterns in market prices (e. g. Kwon and Kish, 2002), many ? ancial economists are sceptical of their existence. Fama (1970) dismissed technical analysis as a futile undertaking on the grounds that historical prices have no predictive validity. However, more recent arguments against technical 23 Growth of Financial Markets trading strategies take a weaker position that while there is some predictability in market movements, exploiting these does not, on average, make returns in excess of transaction costs (e. g. Allen and Karjalainen, 1999). A second important technical strategy requires the analysis of historical price relationships between different ? ancial instruments. Traders register markets looking for discrepancies in pricing relative to these relationships on the assumption that they will move back to the historical pattern. O ften the gains on technical trades will be small and over short time periods, thus these trades often depend on an ability to identify opportunities rapidly and frequently. This allows the trader to make large numbers of such trades each making a small pro? t. To bene? t from such trading strategies requires the ability to trade at low transaction costs, frequently, with considerable IT support.Many traders use technical strategies to supplement other approaches. For example, a trader having established a trade on the basis of customer ? ow information may use technical information on trend behaviour to determine the precise point at which to take pro? ts or cut losses. Others, while fundamentally sceptical about strategies relying on historical trend data, assume prices will be driven to some extent by investors using such models. For example, one trader told us A lot of traders are chartists and a lot of people here dont like you looking at charts, they dont believe in them.Howeve r, I look at a chart if I am putting on a large position, or looking for something to trade because if there are people out there who use charts as a model to trade, this will affect how things trade in the markets whether I believe in it or not. innate Strategies Technical strategies are purely concerned with anticipating trends and pay no attention to the underlying economic basis for evaluation of the security being traded. By contrast, fundamental strategies are concerned with the fundamental relationship between economic value of the underlying asset and market price.Traders following these strategies essentially seek to use expertise and information in the accurate valuation of securities, on the assumption that market values will 24 Growth of Financial Markets converge to theoretical values. To the extent that traders can establish an advantage in valuation of securities, they may be able to earn pro? ts from identifying securities that are undervalued or overvalued by the m arket. One highly successful trader told us I tend to take positions that depend a lot on central bank decisions e. g. nterest rates, so depend on macro economic position of the country, the judgement about how the Bank of England is going to behave and how the market is going to proceed. I try to put myself in Eddie Georges11 feet and try to understand. We have been building a model of Bank of England reactions to economic events. I have lunches with people who decide our interest rates and try to understand how they think . . . It all comes down to focus and completely immersing myself in an area. However, as with insider strategies it can be genuinely dif? cult for a trader to understand whether they have a genuine advantage in valuation.Further, as we will see in Chapter 3, trading on valuation advantage depends on the market converging to a value in a time scale over which you can ? nance a trade. Flow Strategies This strategy predicts prices as a function of demand and supply for securities in the market. Particularly for securities in which there is not much liquidity,12 large trades can shift prices signi? cantly. Where a bank has a large customer base in a particular niche, this can give them access to valuable market information, in particular, information on trading ? ows.These kinds of advantage are more readily achieved in OTC markets, which lack the transparency of trades organized through exchanges. However, in any given market niche, there will be a very limited number of ? rms that can capture suf? cient order ? ow information to give them a genuine advantage. Feldman and Stephenson (1988) studied the use of ? ow information in the US treasury bonds market. They suggest that through the use of informal information trading with customers, a ? rm with a 34 per cent share in trading may have a good sense of what is going on in 30 per cent or more of the market.However, they also show that medium sized players in these markets are often unable to exploit their customer relationships effectively. They argue that large players systematically 25 Growth of Financial Markets shut medium sized players out of information networks while providing good market information to smaller players who they mostly relate to as customers rather than competitors. As we have seen, ? nancial markets have a long history and have been through multiple cycles of global ? nancial integration over the last two millennia, but their development into domains of such immense complexity and global in? ence has occurred only within the last 50 years. The rule book of trading and of traders has no historical precedent, nor has the complexity and variety of the instruments traded. Within this context, the activities of traders within investment banks are important not just to their customers, but also at the level of national and international economies. Naturally, these phenomena have attracted the attention of academics and commentators, from a variety of disciplines, who have, as we shall show in the next chapter, different and sometimes competing explanations of what in? uences and explains behaviour within global ? ancial markets. Notes 1. Derivatives are ? nancial products, which depend on or derive from other assets. 2. Values in all ? gures are nominal (non-in? ation-adjusted). 3. OTC derivatives are not traded in an exchange but are contracted directly between the two contracting parties. 4. Exchange requirements generally only require traders selling options to deposit a proportion of the potential claim. Further, speculation using derivatives is often highly leveraged (funded through borrowed funds). 5. Market traded short-term corporate debt. 6. Market-makers stand ready to buy or sell an asset or class of assets.Typically a market-maker quotes a buy (bid) and sell (offer) price to a client before the client declares whether they wish to buy or sell. The spread between bid and offer both provides a return and some protectio n against market movements in the time taken for the marketmaker to readjust their holdings after a trade. 7. There are also important differences between the United States and the United Kingdom in how this tension is regulated. UK banks face fewer constraints on the relationship between customer business and proprietary trading. 26 Growth of Financial Markets 8. The types of ? ancial instruments dealt in by traders cut across these categories. Some traders specialize by a particular type of instrument (e. g. equities or bonds in a particular sector), others deal in a range of instruments related to a particular geographical region or sector. 9. See also Abola? a (1996) for a description of such market stabilizing behaviour by market-makers. 10. Returns in excess of the market risk premium. 11. Eddie George was Governor of the Bank of England at the time of interview. 12. Liquidity the availability of parties unforced to buy or sell a security at any given time. 27 Chapter 3ECONOM IC, PSYCHOLOGICAL, AND SOCIAL EXPLANATIONS OF MARKET BEHAVIOUR For at least forty years psychologists have amassed evidence that economic man is very unlike a real man and that reasonfor now, de? ned by the principles that be expected utility theory, Bayesian learning and rational expectationsis not an capable basis for a descriptive theory of decision making. De Bondt, 1998 I am in fundamental disagreement with the prevailing wisdom. The generally accepted theory is that ? nancial markets tend towards equilibrium and, on the whole, discount the future correctly. I operate using a different theory, according to which ? ancial markets Market Behaviour cannot possibly discount the future correctly because they do not merely discount the future they help to shape it. Soros, 1995 111 If we are to understand traders, we have to ? rst understand the markets they inhabit. Neoclassical economics has been extraordinarily successful in explaining most market behaviour in the aggregate. How ever, it has two principal weaknesses for our purposes. The ? rst concerns what it does not address and the second concerns some important failures at the margins. Neoclassical ? nancial economics treats markets as a given, or naturally arising.Investor preferences and risk appetites are treated as external to the model but predictably ordered and distributed. Markets are modelled as adjusting instantaneously with little attention to the detail of how such adjustments come about. While neoclassical ? nancial economic models effectively explain a great deal of market behaviour, there are some important failures at the margins. There is a wide range of anomalies which are dif? cult to explain within this paradigm. If markets instantaneously adjust and are perfectly ef? cient, then the only role for professional traders is as intermediaries who cannot earn above market returns, but ssentially earn commission as intermediaries. There is nothing to be earned by arbitrage activities or sp eculation. Indeed, it is not even clear within neoclassical accounts of markets that there is a role for intermediation. However, if we assume markets to be only nearly perfect and sticky, the traders role as someone with privileged expertise, tacit knowledge, and access to private information (within limits) makes more sense. Here, traders are the oil in the market machine they are on